Key takeaways
For much of the 20th century, there was a strong belief: each generation would be better off than the last.
That contract—better financial prospects, easier homeownership, earlier retirement—is now in doubt for Millennials and Gen Z.
The younger generations aren't necessarily worse off, but they are following a different, often delayed, path.
For much of the 20th century, there was a widely accepted social contract: each generation would be better off than the one before it.
Parents worked hard so their kids could go further, financially, socially, and personally.
And for decades, that deal held true.
But today’s younger Australians, particularly Millennials and Gen Z, are wondering if that contract has been quietly ripped up.
It’s no longer guaranteed that your kids will own a home sooner, retire earlier, or accumulate more wealth than you did.
So are they worse off? Or just walking a different path?
Let’s discuss what’s really going on.
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Australia’s wealth looks impressive — but looks can be deceiving
According to the 2024 UBS World Wealth Report, Australia now ranks second in the world in terms of median adult wealth, and our national household wealth grew by 11% in the last year alone.
On paper, that’s cause for celebration.
But as Simon Kuestenmacher points out in our latest episode of Demographics Decoded, this figure comes with some hefty asterisks.
“Australia looks artificially wonderful in wealth reports,” Simon says. “Why? Because we include superannuation in our net wealth, which many countries don’t. And because our housing is so expensive, property values inflate our wealth statistics, but that’s not money you can easily spend.”
In other words, our wealth is largely locked up in homes and retirement funds, not liquid assets.
And while the nation is wealthy, that wealth is concentrated.
Baby Boomers, who represent just 25% of the population, control around half of the private wealth in the country.
That’s a result of decades of homeownership, compounding property growth, and favourable tax policies.
It’s not unfair; they played the game that existed.
But it’s left younger Australians feeling like the goalposts have moved.
Millennials: highly Educated, financially strained
One of the striking shifts between generations is education.
Today’s younger Australians are more likely than ever to finish school and attend university. That’s usually seen as a good thing: more skills, more opportunities.
But it’s not quite that simple anymore.
“A uni degree used to put you in the intellectual elite,” Simon explains. “Now, 50% of people have one. And while the cost of degrees has gone up, their value, in terms of career outcomes, has gone down.”
We’ve created a system where degrees are often required for entry-level roles that never used to need them, making them less a symbol of distinction and more a basic filter for job applications.
At the same time, university graduates are entering the workforce later and with significant student debt, delaying their ability to save, invest, and buy property.
Ironically, many large firms - the likes of NAB, Deloitte, and PwC - have now realised that formal education isn't everything.
“Employers are increasingly confident in their own training,” says Simon. “They’re saying, ‘We’ll teach you the way we want things done.’ So, for many young people, a master's degree is no longer worth the time or the debt.”
The takeaway? Education still matters, but it’s no longer the automatic ticket to a better life it once was.
Stagnant incomes, rising costs
Millennials - those born roughly between 1980 and 1995 - also entered the workforce under tough economic conditions: post-GFC uncertainty, the winding down of the mining boom, and sluggish wage growth.
Even those who started their careers with solid pay soon saw income stagnation, particularly those under 40.
At the same time costs, especially housing, rose sharply.
The result? A growing gap between income and affordability, making wealth accumulation harder than ever.
Homeownership: the great generational divide
Perhaps the biggest and most visible shift is in homeownership.
Rates among 20- to 34-year-olds have fallen dramatically over the last two decades.
What was once a rite of passage, buying a home in your 20s or early 30s, is now out of reach for many.
Even when incomes are decent, housing costs have far outpaced earnings.
And that’s before we even get to the difficulty of saving a deposit while renting.
But Simon points out, it’s not just about affordability.
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“We’re delaying everything - partnerships, marriage, babies, home purchases. When you delay buying, you delay the wealth-building benefits that come with owning.”
Meanwhile, renters miss out on capital growth and security.
And without an attractive downsizing market, many Baby Boomers hold onto their large homes, further constraining housing supply.
This creates a cascading effect: younger people rent longer, enter the market later, and build equity more slowly.
Is Gen Z better positioned?
Despite the challenges, Simon offers a glimmer of hope, especially for the younger Gen Z cohort (born after 1996).
“Gen Z is entering the workforce at a time when labour is in demand,” he explains. “They're a smaller generation, which means they can negotiate higher wages early in their careers.”
That alone could make a major difference over time.
And in a few decades, when baby boomers pass on their estates, we’ll see the largest intergenerational wealth transfer in Australian history, an estimated $4 to $6 trillion in assets, much of it in property and super.
However, not all of this will flow directly to Gen Z.
Much of it will pass first to their Gen X parents, who themselves are under financial pressure, supporting both ageing parents and adult children, the classic “sandwich generation.”
Still, Gen Z may benefit indirectly, especially as Millennials upgrade their homes, freeing up stock on the urban fringe for younger buyers.
As Simon puts it, we’re not talking about cheap homes, but about less unaffordable homes.
Technology: a double-edged sword
Of course, today’s young Australians enjoy opportunities previous generations couldn’t have imagined, thanks to digital technology, flexible work, and global connectivity.
But this, too, comes at a cost.
“Technology gave us smartphones, but it also brought social media addiction,” says Simon. “Young women in particular are facing plummeting mental health scores. Young men, meanwhile, are being affected by online gambling, gaming and pornography.”
These aren’t fringe issues.
They’re widespread, and they’re reshaping how younger Australians experience the world, from self-image and relationships to career focus and resilience.
There is some good news, though: awareness is growing, and governments are beginning to act.
South Australia, for example, is moving to ban social media for under-16s, a move backed by research, even if it ruffles feathers in Silicon Valley.
Simon argues that we’ll adjust over time: “Parents are becoming more aware. The next generation will be better guided. We won’t keep repeating the same mistakes.”
So… are they better off?
The short answer: it’s complicated.
Yes, younger Australians have access to better education, longer life expectancy, and the world’s information in their pocket.
But they also face:
- Higher financial hurdles
- Delayed life milestones
- Increased mental health challenges
- Greater uncertainty in the job and housing markets
This isn’t necessarily a story of decline, though.
It’s more a story of delay and divergence.
They’ll still build wealth, just later.
They’ll form families, but perhaps not in the traditional mold.
They’ll succeed, but on different terms.
And they’re doing it in one of the safest, freest, most prosperous countries on the planet.
As Simon puts it, “We’re still moving forward. We’re just adjusting to a new normal.”
Final thoughts
Australia stands on the edge of a demographic turning point.
The choices we make today, about housing, education, taxation, and tech regulation, will shape not just the next generation’s prosperity, but the kind of society we leave behind.
Yes, the game has changed. But the opportunity to win is still there, if we’re prepared to play a smarter, longer-term game.
And that’s where strategic thinking, financial literacy, and dare I say quality property investment advice come into their own.
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