Couples over 65 have experienced a real increase in median net wealth of almost 70%, according to landmark social study

This article is more than 4 years old

This article is more than 4 years old

Fewer than half of all Australian adults will own their own homes by 2017 and superannuation is on track to be the largest source of wealth in the country’s households by the mid 2020s, according to a new report.

The Household, Income and Labour Dynamics in Australia Survey, or Hilda, released on Wednesday, found that home ownership among people aged under 45, particularly in Melbourne and Sydney, had “decreased quite dramatically” since the report was first produced in 2001.

The lead author, Melbourne University professor Roger Wilkins, said home ownership was also having an impact on household wealth, with elderly couples more likely to have higher net wealth because they had already paid off their homes.

“Basically on the trend they have exhibited between 2010 and 2014 we would expect that less than half of all adults will own their own home by next year,” Wilkins told Guardian Australia.

The survey of 17,000 people is completed annually, through a combination of face-to-face interviews and written surveys. Wealth snapshots are taken every four years, with the next one due in 2018.

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Wilkins said there had been “no real increase” in household wealth since 2006 and no real increase in incomes since 2009.

The median household annual disposable income in 2014 was $76,000 and the median household wealth was $400,000.

Wilkins said he expected household income to remain flat over the next few years. “I can’t really see where the growth is going to come form in the next few years,” he said.

“If government takes serious steps to bring the budget into balance that’s gong to have a negative impact for household income. It’s all going to depend on how they do that, how that plays out, who sort of thing, who is going to shoulder the burden.



“I think there’s a very high risk that it’s going to be disproportionately borne by lower-income households, particularly if you are going to cut expenditure.”



He said it would be “disappointing” if the Coalition abandoned its proposed superannuation changes.

Wilkins said the growing superannuation pool and increasing house prices meant superannuation balance was on track to overtake the family home as the biggest source of wealth by the middle of next decade.

“I think I’ve got a fairly negative view of likely future movement in house prices and I think those things will mean that superannuation will start to grow faster than housing wealth.”

The opposition’s treasury spokesman, Chris Bowen, said housing affordability had been “put in the too-hard basket for 30 years” and that reforming negative gearing to encourage new builds was “the most appropriate answer.”

“It’s about time the Liberal party woke up to the fact that aspiration is about owning your own home as well as growing your wealth in other ways,” Bowen told reporters in Sydney on Wednesday. “It’s about owning your own home to provide for your family.”

The survey also found that people were having children later – in their late 20s for women and early 30s for men – but that the timing of children was heavily dependent on women.

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“They econometric models don’t lie,” Wilkins said. “We find no association between likelihood of starting a family and men’s feelings about their partner and their satisfaction with their financial situation, but a strong association with women.”

There was an association between a man’s earnings and the likelihood he would start a family, with the chance of pregnancy increased by 1.5% for each additional $1,000 earned.

“Which is very much consistent with traditional gender roles,” Wilkins said.

The gender pay gap remained, with men’s average earnings increasing 24% in real terms between 2001 and 2014 but women’s average earnings only increasing 18%.

Wilkins said female university graduates were likely to enter the workforce with a higher starting salary but were overtaken within four years, which he suggested could be due to a higher number of women in professions like teaching, where the starting salary is relatively high but does not increase much with time.

The gap in earnings between the highest salaries and lowest salaries was widening, but Wilkins said that had not yet translated to a widening gap in household incomes. He suggested that could be because of an increase in partners picking up part-time work to supplement lower earnings.

A slight increase in the lowest wages meant that the number of people living in poverty – classified as living on half the median household income – had decreased from 11% to 8%, he said.

“We have actually seen a decline in that poverty measure because incomes at the very bottom have increased slightly, but the median income hasn’t really moved at all,” he said. “So it’s easier to have an income that’s more than half of the median because the median hasn’t moved.”