Property-fuelled wealth bonanza for the rich leaving the poor in their wake
New figures reveal how much you need to join Australia’s top 10 per cent club, with a wealth bonanza for this group leaving everyone else in their wake.
Australia’s wealth gap has become a chasm in the past two decades, driven largely by the haves and have-nots of home ownership, with the average household wealth of the richest 10 per cent soaring 84 per cent to $5.2m, new research finds.
The wealth bonanza for the richest decile – those with at least $2.6m in assets – leaves them in possession of 44 per cent of all wealth in Australia.
It stands in stark contrast to the poorest 20 per cent of Australians, whose average wealth now sits at $41,000, just 17 per cent higher than in 2003, the study by the University of NSW and the Australian Council of Social Service finds. Average housing wealth for this group is less than zero.
The contrast between the rich and the rest remains significant even if the lowest 60 per cent of households in terms of wealth are lumped together, with their average wealth sitting at $343,000, up 55 per cent since 2003.
The report, Inequality in Australia 2024, finds nearly half of the total increase in household wealth since 2003 (45 per cent) went to the richest decile, with half of that falling into the hands of older Australians aged 65+ in that bracket.
Older Australians are taking an increasing share of overall wealth, up from 27 per cent to 34 per cent since 2003, mainly at the expense of middle-aged households (35-64 years), whose share declined from 65 per cent to 59 per cent.
While those under 35 have only 7 per cent of the nation’s wealth, it was here where one of the largest disparities emerged.
“The wealth of the lowest 60 per cent of young households, a group largely excluded from home ownership – rose by just 39 per cent (from $68,000 to $80,000 between 2003-2022) while that of the highest 10 per cent rose by a brisk 126 per cent (from $928,000 to $2m),” the report said. Home ownership was a key differentiator, the report found, with the least wealthy 60 per cent having an average $156,900 in owner-occupied housing wealth, compared with $1.6m for the top decile.
“Of the average $1.2m in household wealth in 2022-23, 61 per cent was in owner-occupied housing, 20 per cent in superannuation and 19 per cent in shares, financial and business investments,” the report said.
The study showed the top 10 per cent held 44 per cent of all household wealth and the next
30 per cent had 38 per cent, leaving the bottom three quintiles with just 18 per cent of total wealth.
“Ownership of shares and other financial assets and investment property were particularly skewed towards the top. The highest 10 per cent held 64 per cent and 66 per cent of these assets respectively,” it said.
“Ownership of superannuation and owner-occupied homes was somewhat less concentrated, with 41 per cent and 35 per cent respectively held by the highest 10 per cent.”
The study pointed out that in contrast to wealth, wage inequality had narrowed in recent years due to relatively full employment, with average weekly earnings for the lowest 10 per cent of employees growing 1.5 times faster than the highest 10 per cent, though significant income disparity remained.
ACOSS chief executive Cassandra Goldie said: “People with the lowest income and least wealth are being left behind by the increasing inequality in Australia.
“Without major reform to housing, superannuation tax breaks and income support, the divide between those with the most and those with the least will continue to deepen.
“Reducing tax concessions for negative gearing and capital gains, as well as superannuation, that speed wealth accumulation among the highest 10 per cent and increase housing prices would help stem growth in wealth inequality.”
UNSW Professor Carla Treloar said the report showed “full employment reduces inequality, increasing income support payments reduces inequality (and) reducing those tax concessions that disproportionately benefit those with the most reduces inequality.”
Mission Australia chief executive Sharon Callister said the “relentless growth in wealth inequality … stands in sharp contrast to the level of income support many people have to rely on, especially the $55 a day JobSeeker Payment.”
