Eddie Kleut, 25, of Adelaide says trying to get into the housing market is getting harder and harder for Gen Y. Picture: Mark Brake

Analysis by social research group McCrindle has found that Generation Y — people aged 25 to 34 — are holding a shrinking portion of Australia’s private wealth, as rising property and share prices boost the nest eggs of retirees and Baby Boomers.

Low wages growth is affecting their ability to earn and save, prompting them to be labelled “Generation Stagnation” by social researcher Mark McCrindle.

“We have seen a generation that has been shut out of property ownership and have lost the capacity to get property, which was the traditional Aussie dream,” he said.

“Gen Y earners have seen their household incomes rise by around $5000 in the last two years while the retirees aged 65-plus have had income increases above $7000, even though they generally aren’t working.

“It’s a generation that can’t win — income growth should be one strength they have over the over-65s.”.

Mr McCrindle questioned why young Australians were not more vocal about their plight. “They have to put up with policy that is favouring an ageing population. There’s not the push-back you might expect.”

Klemich Real Estate director Matt Smith said he was seeing more older buyers flooding markets that used to be the domain of first home buyers.

“I can see the frustration of younger buyers who have saved up a good deposit and might be able to stretch themselves but it’s still not enough when you’re up against middle-aged buyers with cash to spend,” he said.

Social researcher Mark McCrindle says the land of the middle class is now under threat. Picture: istockSource:Supplied

Edward Kleut, 25, has been living with his parents while trying to save a deposit for his first home.

“It is difficult as a young person to get involved in the housing market due to the high price of properties which just seem to be continuing to grow. You just feel like you don’t ever have a chance,” he said.

“There’s just so much competition out there, it’s pretty daunting.”

Mr McCrindle said Australia needed innovation in areas such as tax, superannuation and transferring wealth between generations to allow older parents to better support children.

His research also found a widening gap between the haves and the have-nots, with the top 20 per cent of households now having average earnings 12 times higher than the bottom 20 per cent. Their average wealth is 71 times greater — at $2.5 million versus $35,000.

“It is a worrying trend — there’s a bigger divide today compared to two years ago,” Mr McCrindle said. “The land of the middle class is now under threat.”

Mr McCrindle said middle class was traditionally based on owning a detached house, a couple of cars and a holiday each year. He said today’s house prices were beyond the reach of many, 40 per cent of children were attending non-government schools, and overseas holidays were now common.

The research found that household income was below the national average in Victoria, Queensland, South Australia and Tasmania. Household wealth was below the national average of $809,900 in SA, Queensland, Tasmania and the NT.

WHERE DOES YOUR HOUSEHOLD FIT?

AVERAGE INCOME

Top 20% - $260,104

Fourth 20% - $124,956

Third 20% - $80,704

Second 20% - $47,944

Lowest 20% - $22,620

AVERAGE WEALTH

Top 20% - $2.51 million

Fourth 20% - $830,600

Third 20% - $462,500

Second 20% - $206,100

Lowest 20% - $35,500

Source: McCrindle