A seismic wealth transfer has created what experts are calling Australia's greatest intergenerational divide, with baby boomers accumulating unprecedented fortunes while younger Australians face financial realities their parents never imagined.
The Property Paradox: From Affordable to Unattainable
Where post-war generations could purchase homes on single incomes, today's young Australians confront a housing market that has become virtually impenetrable for many. Property prices have skyrocketed while wage growth has stagnated, creating a perfect storm of financial exclusion.
The numbers tell a sobering story:
- Boomer households control over half of Australia's private wealth
- Property values have increased nearly 500% since the 1990s
- Average mortgage sizes have tripled relative to incomes
- Rental costs consume record portions of young workers' salaries
The Perfect Storm: Policies That Built Boomer Wealth
Several converging factors created this wealth bonanza for older Australians while leaving subsequent generations struggling:
- Financial deregulation in the 1980s opened investment opportunities
- Compulsory superannuation created forced savings with decades to compound
- Capital gains tax discounts favoured property investors
- Negative gearing policies incentivised property speculation
- University education became fee-based, creating student debt for younger Australians
The Intergenerational Fallout
This wealth concentration isn't just about numbers—it's reshaping Australian society. Young people are delaying major life milestones, with many questioning whether they'll ever achieve the Australian dream their parents took for granted.
The consequences are profound:
- Record numbers of young adults living with parents into their 30s
- Declining birth rates as financial security becomes elusive
- Mental health crises linked to financial stress and housing insecurity
- Geographic displacement as housing costs force moves away from family networks
A System Under Strain
Economists warn that this wealth concentration threatens Australia's long-term economic stability. When younger generations can't accumulate assets or participate fully in the economy, everyone ultimately pays the price through reduced consumer spending, lower productivity, and increased pressure on social services.
The very policies that created boomer wealth now threaten to undermine the intergenerational contract that has long defined Australian society. As one analyst noted, "We've created a system where success depends largely on when you were born rather than how hard you work."
This isn't just an economic issue—it's a fundamental question about what kind of Australia we want to build for future generations. The solutions will require difficult conversations about tax reform, housing policy, and what intergenerational fairness really means in the 21st century.
