Remember school swimming lessons?

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Oh the joys of running back to class with dripping wet hair and a wet towel soaking everything at the bottom of your backpack.

Before getting in, the teacher would split you into three groups:

• The strong swimmers (kids who'd basically been born in the ocean and made it look effortless)
• The middle group (capable enough to get from one end to the other, but not exactly Olympic material)
• And the beginners (who spent most of the lesson practising breaststroke on the pool deck, nowhere near the water)

Once you were in, the gap became obvious fast.

The strongest group would speed ahead, the middle group would sort of just tread the water… making it to the end slowly but surely.

And the beginners? They’d spend most of the lesson clutching onto the sides, not moving at all.

Well, Australia’s wealth gap is starting to look a bit like this.

The thing is, the gap between the wealthiest households and everyone else has actually widened over the past five years.

Between 2019-20 and 2024-25, average household wealth jumped from $1.26 million to $1.56 million, according to KPMG data. That’s nearly 24% in just five years.

And median household wealth? Basically unchanged at $700,000.

Quick maths lesson for you: When the average shoots up but the ian stays flat, it means the gains are concentrated at the top.

Sound fair? Maybe if you're in that top end… But for most Australians, the finish line keeps moving further away.

How did we get here?

Before the pandemic (sorry to bring it up)... household wealth growth was fairly even.

Between 2014 and 2020, median wealth grew 11% and average wealth grew just over 10%.

When those two numbers move together, it means everyone's wealth is growing at roughly the same pace.

But during the pandemic, interest rates sat at near zero.

This drove up the value of assets (particularly property assets).

Home values nationally rose by about 38.4% from 2020 to 2025. But wages increased by less than half the increase of housing in that same period.

It’s a huge part of what’s fuelling a larger wealth divide.

Households who already owned property, or who were able to get on the property ladder while interest rates were low, are now seeing their wealth grow - fast.

But those who missed out - think uni students, people just starting their first jobs, single income households, or renters trying to save a deposit while rent kept rising…

They’re now watching that window close. Possibly for good.

Why should you care?

The changing landscape over the last five or so years hasn’t just boosted wealth …it’s reshaped who benefits from it.

For those who owned the right asset at the right time, things are looking pretty good.

For those who didn’t? It’s easy to see why you’d be feeling like you’ve been locked out.

It’s why the government says it had to make a bunch of changes to the way those assets are taxed (which you can read about here and here).

Whether or not those changes will actually help? Too soon to tell.

But the wider the gap gets, the harder it becomes for anyone to pretend it isn't there.