Property Edge

The Great Australian Wealth Mirage: When Property Becomes a Privilege

The Great Australian Wealth Mirage: When Property Becomes a Privilege

In the grand theatre of Australian prosperity, the spotlight now shines on a startling revelation: the average home price has soared past 1 mil, marking a significant milestone in the nation’s property market. While this surge benefits property owners, it exacerbates the wealth gap, leaving many aspiring homeowners behind.

Consider this: the combined wealth of Australia’s 200 richest individuals has ballooned to 667.8 bill, accounting for 24.5% of the nation’s GDP—a substantial increase from 8% in 2004. This concentration of wealth underscores the growing disparity between the affluent and the average citizen.

Property: The Engine of Inequality

Property ownership remains a primary driver of wealth accumulation in Australia. Land and dwellings constitute approximately 55% of household assets. However, the benefits are unevenly distributed. While property values have risen sharply, wages have not kept pace, making it increasingly difficult for non-owners to enter the market.

Taxation: A System Favouring the Affluent

The current tax structure offers significant advantages to the wealthy. Capital gains tax discounts and generous superannuation concessions disproportionately benefit high-income earners. For instance, the recent proposal to tax superannuation balances over 3 mil affects only 0.5% of Australians, yet it has faced substantial opposition. We could go on and on but a picture paints a thousand words.

Here’s the full sad and sorry story in 7 graphs:

img 01 - Property Lovers

Source: ABS

img 02 - Property Lovers

Source: BIS, ABS National Accounts

img 03 - Property Lovers

Source: ABS

img 04 - Property Lovers

Source: ABS

img 05 - Property Lovers

Source: ABS

img 06 - Property Lovers

Source: ABS

img 07 - Property Lovers

Source: ATO Data

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