The gap between the wealth of retired homeowners and renters in Australia is widening, with new data showing that homeowners are, on average, six times wealthier than renters in retirement. Although owning a home is often seen as a pathway to financial security, rising property prices and falling ownership rates are leaving more retirees financially vulnerable.
The Melbourne Institute’s latest HILDA (Household, Income and Labour Dynamics in Australia) survey, which tracks nearly 9000 households, provides a detailed snapshot of financial wellbeing during retirement. Despite consistent growth in superannuation balances over the past two decades, housing remains the main factor influencing retirees’ net worth. In 2023, retirees who had fully paid off their homes recorded an average net wealth of $1.66 million. This figure reflects average property values above $1.1 million and superannuation balances close to $500,000.
This stands in stark contrast to retired renters. Their average superannuation sits around $277,000, with no property assets to supplement their financial position. Although based on a small sample size, the figures highlight a significant divide. Retired renters now represent 12% of the population, up from 6% in 2003. They are now spending nearly 40% of their income on rent, up from 33% in 2003. Over the same period, house prices have increased more than 400%, which is more than twice the rate of wage growth. This surge has made it increasingly difficult for younger people to enter the property market.
These shifts are having a wide impact on retirement outcomes across Australia. With fewer people owning homes outright, rising numbers are heading into retirement either still paying off mortgages or renting. This places added pressure on superannuation to make up the difference. That challenge is unlikely to ease, particularly as gender income gaps persist and housing affordability worsens for younger Australians. In the absence of major changes to housing policy or superannuation systems, the financial stability of future retirees remains at risk.
