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 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.
That group, which has grown from 15 per cent to 22 per cent of households over the past decade, has benefited from strong gains in property and share markets, along with rapid debt reduction.
“For these households, wealth hasn’t just grown, it’s multiplied into the millions,” the report says.
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 Australia’s average household wealth.
This group includes pensioners and other low-income groups who don’t own a home, along with younger people yet to accumulate significant assets.
Terry Rawnsley, who conducted the analysis, said this low wealth segment of the population had missed out on the post-pandemic asset boom.
“Without housing or investment assets, wealth for these households has been largely stagnant,” he said.
The wealth findings come as the federal government prepares to unveil measures to promote “intergenerational” equity in Tuesday’s federal budget.
Treasurer Jim Chalmers is expected to scale back provisions that favour property investors, including the 50 per cent capital gains discount and negative gearing rules. An increase to the minimum tax on discretionary trust distributions is also anticipated.
“I think it’s really clear to a lot of Australians that the housing market and the tax system is making it harder for people, particularly for younger people,” Chalmers said last week.
Family budgets have been sapped by a lingering post-pandemic cost-of-living crunch stoked by elevated inflation and higher interest rates. KPMG’s analysis shows that those factors have coincided with stagnating wealth for millions of households.
“These numbers help explain the frustration we’re seeing as people feel they’re not getting ahead but see the top end of town pulling away,” said Rawnsley.
The difference between the average wealth and median wealth of households during the past five years highlights the growing wealth disparity.
Average household wealth surged from $1.26 million to $1.56 million between 2019-20 and 2024-25, an increase of 24 per cent in real terms.
But the median, or middle value, of household wealth was basically unchanged at about $700,000 during that period.
Only about one-fifth of households have the nation’s average wealth level, or higher, the KPMG modelling shows.
“The data suggests wealth growth has been concentrated among the richest households, rather than reflecting broad improvements across the community,” said Rawnsley.
“Asset owners surged ahead, while households without property or investments were largely left standing still, despite superannuation helping the poorest households.”
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,” Rawnsley said.
Get the day’s breaking news, entertainment ideas and a long read to enjoy. Sign up to receive our Evening Edition newsletter.
