Gen X has now overtaken Baby Boomers for property wealth

An analysis of asset distribution across four generational groups conducted by KPMG has concluded that Gen X has now overtaken Baby Boomers for property wealth, as well as to shares.

According to KPMG’s sums, Gen X now holds an average value of $1.31 million in property, marginally eclipsing the Boomers, with the latter generation beginning to exit their portfolios as they head towards ‘retirement’.

This contrasts with the average $750,000 and $69,000 respectively held in housing in Australia by denizens of the Millennial and Gen Z eras, highlighting, the firm says, the challenges younger generations face in entering the market.

Naturally, the KPMG report has generated numerous headlines, with a vast proportion of the local population currently battling a severe cost-of-living and housing affordability crisis and placing much of the blame on the Boomers’ earlier economic advantages and the government’s ongoing incentives as to the accumulation of property. Can we all now hate on our Gen X landlords instead?

The data, however, contains a number of in-built caveats, with perhaps the most pertinent being the midpoint age of each ‘generational’ group adopted for the analysis, such that ‘Gen X’ refers to 51 year-olds, while the ‘Boomers’ are still a year shy of their 70th birthdays. And with an average net worth way ahead of other cohorts, the latter will certainly be able to host a decent celebration.

According to KPMG, 69-year-old Boomers have an average net worth of over $2.3 million, with around a quarter of a million of that now in cash deposits, while X’ers who have recently made it past 50 boast equivalent holdings of $1.88 million, the latter bolstered by the increasingly common inheritance of property from their parents born nearer to the start of the post-war crew in 1946.

As part of the overall breakdown, Gen X also now has a higher figure invested in shares, over a quarter of a million dollars against the Boomer average of closer to $200,000, whereas Millennials – or those aged 35 – have considerably less wealth tied up in the stock market at just a shade over $50,000. A mid-point member of Gen Z, as taken by KPMG, was still a teenager up until last year.

“Boomers have historically been the largest holders of housing assets, but are gravitating towards higher cash holdings, reflecting their inclination towards safer investments,” concludes KPMG economist Terry Rawnsley. “While the starter’s gun has been fired on the great wealth transfer, our findings demonstrate a clear disparity in housing wealth between older and younger generations.”

Further parsing

Here, the line between ‘older’ and ‘younger’ generations gets a bit blurry, when a distinct gap can be seen within each grouping. A person born in the mid-70s of Gen X compared to another emerging at the tail-end in the early 80s are quite different propositions, especially when considering the dynamics of transfer and dramatic jump in inequality over the past thirty-odd years

While no model will ever be perfect, and KPMG readily acknowledges these shortcomings, a more accurate representation of Australia’s current wealth landscape might better be arrived at via a still arbitrary decade-by-decade analysis, further factoring in the country’s rapidly expanded population over that time along with both a declining birth-rate and later start to having children.