It feels like a pressure cooker. When is it going to stop?
Across Australia, a structural divide is quietly hardening between generations — not through sudden rupture, but through the slow accumulation of advantage on one side and disadvantage on the other. Research from the Actuaries Institute reveals that younger Australians are falling behind their elders in housing, economic wellbeing, and environmental resilience at a pace not seen in living memory, while home ownership rates among the under-35s have retreated to levels last recorded in 1947. The forces at work — stagnant wages, soaring property values, rising insurance costs, and a climate growing less forgiving — are not accidental, but the compounded result of decades of policy choices that have made wealth easier to keep than to build.
- Home ownership among Australians under 35 has collapsed to 1947 levels, while older homeowners sit atop decades of property appreciation they did nothing to engineer — a structural lottery decided by birth year.
- With dwelling values at 8.2 times average income and a 20% deposit taking 11 years to save, younger Australians are not merely priced out of a market — they are being locked out of the primary mechanism by which their parents built wealth.
- Insurance premiums have surged 51% in five years, and as climate disasters intensify, coverage in vulnerable regions is becoming either unaffordable or unavailable — threatening to strip younger, asset-poor households of what little security they hold.
- Older women are emerging as an unexpected casualty of the same system: with superannuation balances 25% lower than men's and aged care costs rising, a cohort that sacrificed career continuity for family is now facing poverty in retirement.
- Federal legislation targeting capital gains tax and negative gearing signals political recognition of the problem, but analysts warn the structural roots run far deeper than any single tax reform can reach.
In Rockhampton, Mady budgets for a family of six and finds the numbers no longer add up. Streaming services are gone, renovations are paused, and a leaking roof went unrepaired for longer than it should have. Interest rate rises have pushed mortgage repayments higher while groceries, utilities, and insurance have climbed in step. A neighbourhood garage sale in June is her best hope of restarting savings. "It feels like a pressure cooker," she said. "When is it going to stop?"
Mady's situation is not exceptional — it is, according to new research from the Actuaries Institute, increasingly typical. The Institute tracked 25 indicators across six domains of Australian life since 2000, comparing three age cohorts, and found that while all generations are materially better off than they were a quarter-century ago, the trajectories have sharply diverged. In economic wellbeing, housing, and environmental resilience, younger Australians are going backwards even as older generations continue to accumulate advantage.
The housing market is the starkest expression of this divide. Home ownership among Australians under 35 has fallen to levels not recorded since 1947; for those aged 35 to 44, it has slipped to 1954 levels. Meanwhile, ownership among Australians over 65 remains at its 1966 peak — and because property values have soared in the decades since, older homeowners have captured wealth gains that younger Australians cannot access. The dwelling value-to-income ratio now sits at 8.2, well above its 20-year average of 6.8, and servicing a mortgage consumes roughly 45 percent of weekly income. "They have less opportunity to get in and start accumulating wealth in that way," said Hugh Miller, one of the report's lead authors.
Underpinning the housing crisis is a decade of wage stagnation. The historical pattern of wages rising one percent above inflation each year has broken down, and a Pew Research Centre study found that 79 percent of Australians believe their children will be financially worse off than they are — one of the bleakest readings in the world. Independent economist Saul Eslake was direct: home ownership has become the primary engine of intergenerational inequality in Australia.
Climate change threatens to deepen the fracture further. Home insurance premiums have risen 51 percent in five years, and in regions exposed to extreme weather, coverage is becoming unaffordable or simply unavailable. Miller warned that climate impacts on housing will compound the structural disadvantages younger Australians already carry.
The picture for older Australians is not uniformly secure. A growing cohort of older women — many of whom stepped out of the workforce to care for children or relatives — face retirement with superannuation balances 25 percent lower than men's and rising aged care costs that previous generations rarely confronted. The federal government has moved to adjust capital gains tax and negative gearing rules, but analysts caution that the structural challenge runs far deeper than tax settings alone can resolve. For families like Mady's, the pressure shows no sign of easing.
Mady sits down to budget with her family of six in Rockhampton, Central Queensland, and the math no longer works. She has already eliminated streaming subscriptions, paused home renovations, and spent hours comparing insurance policies. The roof leaked until recently. The stumps need replacing. Termites are active outside. But the Reserve Bank's interest rate rises have made the mortgage payments climb, and everything else—groceries, utilities, the cost of living itself—has risen in tandem. She is planning a garage sale with neighbors in June, hoping to scrape together enough cash to restart savings. "It feels like a pressure cooker," she said. "When is it going to stop?"
Mady's household strain is not an isolated story. Research from the Actuaries Institute, which examined 25 indicators across six domains of Australian life since 2000, has found that inequality between younger and older generations is widening at a pace that could reach record levels within years. The analysis tracked three age cohorts—those aged 25 to 34, 45 to 54, and 65 to 74—and found that while all generations are materially better off than they were in 2000, the trajectory has diverged sharply. In three critical areas—economic wellbeing, housing, and environmental resilience—outcomes for younger Australians are deteriorating even as older generations continue to accumulate advantage.
The housing market is the clearest expression of this divide. Home ownership among Australians under 35 has fallen to levels not seen since 1947. For those aged 35 to 44, the rate has slipped back to 1954 levels. Meanwhile, home ownership among Australians aged 65 and over remains at its 1966 peak—and because property values have soared in the decades since, older homeowners have captured enormous wealth gains that younger Australians cannot access. The dwelling value-to-income ratio has climbed to 8.2, well above the 20-year average of 6.8. It now takes an average of 11 years to save a 20 percent deposit, and servicing a mortgage consumes roughly 45 percent of weekly income. "You won't necessarily see the same rapid gains for younger people as they accumulate wealth or because they're locked out of the housing market," said Hugh Miller, one of the lead authors of the Actuaries Institute report. "They have less opportunity to then get in and start accumulating that wealth in that way."
Wage stagnation is the engine driving this divergence. For more than a decade, wages for younger Australians have barely moved despite inflation. Historically, Australian wages climbed roughly one percent above the consumer price index year after year. That pattern has broken. A Pew Research Centre study found that 79 percent of Australians believe their children will be financially worse off than they are—a result among the worst in the world. Independent economist Saul Eslake noted that home ownership has become the primary driver of intergenerational inequality. "Home ownership among people aged under 35 is back to where it was in 1947," he said. "Among people aged between 35 and 44, it's back to where it was in 1954. Whereas home ownership among people aged 65 and over hasn't changed from its peak at the census of 1966 and, of course, given how much house prices have risen, that's been of enormous advantage to older people."
Climate change and rising insurance costs threaten to deepen these fractures further. Home insurance premiums have increased by 51 percent in the past five years. As extreme weather events intensify, insurance becomes either unaffordable or simply unavailable in certain regions. Communities already vulnerable—those without economic resources to relocate or absorb premium increases—face the prospect of being unable to insure their homes at all. Miller emphasized that this creates a cascading problem: climate impacts on housing affordability will compound the existing structural disadvantages younger Australians already face.
The picture for older Australians is not uniformly rosy. A growing cohort of older women are living in or near poverty, Eslake said, often because they never achieved home ownership or lost it through family breakdown. Women aged 60 to 64 have a median superannuation balance of $153,685, compared to $205,385 for men—a 25.2 percent gap. Many older women took time out of the workforce to care for children or relatives, reducing their retirement savings. An emerging crisis is also taking shape around aged care access: as Australians live longer, the cost of finding suitable, affordable nursing home care has become a serious concern that previous generations rarely faced.
The federal government has acknowledged housing inequality as a policy problem and introduced legislation to change the capital gains tax discount and negative gearing rules. But the structural challenge runs deeper than tax settings. Miller noted that home ownership rates fell 10 percentage points over 25 years before stabilizing in recent years, likely due to low post-COVID interest rates and government incentives. Whether that stabilization holds depends on forces largely beyond individual control—interest rates, wage growth, climate impacts, and the willingness of policymakers to reshape the rules that have allowed property wealth to concentrate so heavily among older Australians. For families like Mady's, the pressure continues to mount.
Notable Quotes
You won't necessarily see the same rapid gains for younger people as they accumulate wealth or because they're locked out of the housing market.— Hugh Miller, Actuaries Institute
Home ownership among people aged under 35 is back to where it was in 1947.— Saul Eslake, independent economist
The Hearth Conversation Another angle on the story
Why does housing matter so much more than other kinds of wealth?
Because it's the primary way Australians have historically built wealth. You buy a house, live in it, and over decades it appreciates. Older Australians got in when prices were low relative to income. Younger people face a market where it takes 11 years just to save a deposit. The wealth gap is really a housing gap.
But wages have gone up since 2000, haven't they?
Not for younger workers. That's the puzzle. Everyone's better off in absolute terms than in 2000, but wage growth has stalled for a decade while house prices kept climbing. The ladder that worked for previous generations has been pulled up.
What about the older women you mentioned living in poverty?
They're invisible in the aggregate numbers. Most older Australians are doing well because of property wealth. But women who never owned homes, or lost them through divorce, have minimal superannuation because they took time out to raise children. They're facing aged care costs with inadequate savings.
Is climate change really a wealth issue?
It is now. Insurance premiums are up 51 percent in five years. In some regions, homes are becoming uninsurable. If you're young and can't afford a house anyway, rising insurance costs on the one you might eventually buy just makes it worse. It's another layer of disadvantage.
Can policy fix this?
The government is trying—changing capital gains tax, negative gearing rules. But the core problem is structural. Younger people need wages to grow faster than house prices, or they need to get into the market earlier. Neither is happening naturally right now.
So what does Mady do?
She keeps cutting, keeps saving, keeps hoping. A garage sale in June. Paused renovations. She's doing everything right and it's still not enough. That's the real story.