A new report by KPMG reveals that the post-pandemic asset boom has disproportionately benefited the richest fifth of households, widening the wealth gap between them and the rest of the population. The analysis also highlights the stagnant wealth of households without property or investments, particularly those with lower incomes.
A key indicator of household wealth has stagnated over the past five years as the gap between Australia's richest households and everyone else widens. Median household wealth - the middle value for all households - has been stuck around $700,000 since 2019-20 despite a surge in the value of housing and other assets since the COVID-19 pandemic.
New modelling by KPMG shows the post-pandemic asset boom, fuelled by ultra-low interest rates, disproportionately benefited the richest fifth of households, which have net wealth of $1.6 million and above. About a third of Australian households - a total of 3.35 million - hold less than $300,000 in wealth, which is less than half the nationwide median wealth and just 19 per cent of this group includes pensioners and other low-income groups who don't own a home, along with younger people yet to accumulate significant assets.
The wealth findings come as the federal government prepares to unveil measures to promote “intergenerational” equity in Tuesday's federal budget, including the 50 per cent capital gains discount and negative gearing rules. Family budgets have been sapped by a lingering post-pandemic cost-of-living crunch stoked by elevated inflation and higher interest rates. The difference between the average wealth and median wealth of households during the past five years highlights the growing wealth disparity.
Only about one-fifth of households have the nation's average wealth level, or higher, the KPMG modelling shows. The number of households within the middle band of net wealth, between $300,000 and $900,000, has declined during the past decade, because rising house prices have lifted some in that group into the higher $900,000 to $1.6 million bracket, which has grown as a share of the population during the past five years.
Households in the $900,000 to $1.6 million bracket had enough equity in their homes to benefit from the post-pandemic asset surge. The compounding effect of property and superannuation really shows up in this group and, with mortgage debt largely under control, wealth accumulation continues to accelerate very quickly
Household Wealth Median Wealth Asset Boom Ultra-Low Interest Rates Negative Gearing Rules Intergenerational Equity Capital Gains Discount Post-Pandemic Cost-Of-Living Crunch Wealth Disparity Households Without Property Or Investments Rising House Prices Wealth Accumulation Compounding Effect Of Property And Superannuat
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