Housing affordability widening intergenerational equity gap: Study

The gap between older and younger Australians is headed for record levels due to wealth and housing affordability constraints, new analysis shows.

The Actuaries Institute's Cracking the Unsolved Generational Equation report, which provides update on the Australian Actuaries Intergenerational Equity Index (AAIEI), tracks the changes in social, environmental, housing, health, and more across different demographics. This includes the wealth and wellbeing of Australians aged 25-34, 45-54 and 65-74 since 2000.

Over the past two years, 65-74-year-olds gained an average of $375,000 in household wealth and 45-54-year-olds gained $336,000. They also have higher levels of wealth and wellbeing than they did in 2000.

Both groups gained more than three times the $98,000 made by 25-34-year-olds, presenting a worrying wealth gap between the generations.

While the wealth issue also extends to other metrics such as social, environmental and health, housing affordability remains one of the most persistent drivers of worsening intergenerational equity, the report said.

"Lower post-pandemic interest rates plus some government interventions appear to have made a difference," Actuaries Institute member Laura Dixie said.

"But issues remain. Many young people rely on the 'Bank of Mum and Dad', and while this helps some, it worsens inequity within age groups and embeds advantage for people born into wealthier families. And the rental burden has increased, across all age groups."

Despite better employment numbers and an increase in government spending to support the housing sector, the trend is further reflected by Anglicare's 2026 Rental Affordability Snapshot in Greater Sydney area and the Illawarra.

Through its analysis, for those earning the minimum wage, only three of the 12,155 private rentals advertised over the weekend of March 14-15, were affordable and appropriate.

Across all categories of those earning the minimum wage, 1.51%, or one in 70, rental listings across were affordable, it said.

Anglicare group executive of housing Rob Stokes said: "The great Australian dream used to be having a house to call your own, near family and friends, and close to work. Now people are lucky to find a rental that doesn't immediately tip them into financial distress."

"If you're a minimum wage earner, this means that just 1 in every 70 rentals across Sydney and Illawarra are affordable. Imagine scrolling past 70 listings to finally find one you can afford, and when you turn up there's an enormous line just to get a viewing.

"That's not the great Australian dream, it's a nightmare and it is only getting worse."

Stokes is calling on the government to provide greater protections including stronger supply of social and affordable housing, increased financial assistance for private renters and priorities vulnerable groups for housing schemes.

"Anglicare has been studying rental affordability for nearly two decades and all we have seen is the issue escalate and spread," he said.

"The time has come for us to stop circular debates about supply vs demand and instead make policy changes to ensure every Australian has the opportunity to have housing security, rather than be filled with dread about how they will afford to keep a roof over their head, if they can find one at all."

Where progress is being made

On some AAIEI measures, the intergenerational equity gap has reduced - particularly in areas relating to employment, the Actuaries Institute said.

Despite concerns over the potential impact of artificial intelligence (AI), unemployment has been at its lowest level this century since 2022, and younger Australians have seen the greatest benefits.

Real household income has increased, with those aged between 45-54 having seen the largest growth, followed closely by the 25-34 cohort - although the gains have been smaller than those made over 2000-2010.

The gender pay gap is also at its lowest recorded level, driven largely by gains for the 25-34 age group, which improves intergenerational equity, the report said.

Actuaries Institute chief executive Elayne Grace said the growing disparity between younger and older generations is concerning.

"Many policy settings around housing, retirement and tax implicitly favour existing asset holders, reinforcing intergenerational gaps. Additionally, Australia's ageing population increases pressure on spending on older cohorts while shrinking the working age tax base," Grace said.

"This report highlights a range of policy topics with potential to address issues of intergenerational equity."