For a millennial household it takes over 5.5 years to save for a deposit. A household earning the median income in Australia can now afford just 13% of homes sold across the country, compared to the relative ease my generation experienced entering the property market.

Baby Boomers aged 25–39 in 1991 were three times more likely to own their homes outright than Millennials aged 25–39 in 2021.

Think about that for a moment – we’re not talking about minor shifts in affordability, but a complete structural change in how wealth building works in Australia.

Generation Z holds the smallest average housing wealth, at just $69,000, while Gen X boasts $1.31 million in housing wealth, slightly edging out Baby Boomers at $1.30 million. The wealth gap isn’t just about age – it’s about completely different economic starting points.

For Gen X and Boomers, wealth building was relatively straightforward: buy property, hold long-term, benefit from capital growth. According to CoreLogic data, Australian house price growth over the last 30 years has averaged 6.4% each year.

We didn’t need to be particularly sophisticated investors. Property appreciation largely took care of itself, driven by population growth, relatively stable interest rates, and crucially, affordable entry points relative to incomes.

But that playbook no longer works for most young Australians. The time required to save for a deposit tells the stark story of declining affordability.

In the 1980s, it took just over 2 years to save for a 20% deposit. In early 2020, it took 7.4 years to save a 20% deposit for the median home on a median income. By 2025, that figure has risen to 10.0 years for capital cities – meaning young Australians now need an entire decade of dedicated saving just to get a foot in the door.  

What strikes me most about my daughters’ generation is their financial awareness. They understand concepts like compound interest, diversification, and alternative investments in ways that many of my peers still don’t. They’ve had to develop this sophistication because the simple “buy property and wait” strategy is largely inaccessible to them.

My daughters are perfect examples of this financial sophistication. Both have devoured Scott Pape’s “The Barefoot Investor” books and religiously follow his advice – something that would have been unthinkable for most people my age at their stage of life.

They understand bucket strategies, emergency funds, and investment principles that many adults still struggle with. Rather than simply lamenting the reality of unaffordable housing, they’re actively seeking alternative wealth-building strategies.

This is where the story gets interesting. Unable to access traditional property investment at scale, Gen Z is increasingly turning to alternative investments that previous generations largely ignored. Private credit funds, for instance, have emerged as a compelling option. 

Private credit funds in Australia, similar to those offered by Ark Capital have emerged as a compelling alternative, offering returns around 10% annually. But it’s the private real estate credit sector that’s particularly caught Gen Z’s attention – perhaps because property investment remains deeply embedded in the Australian psyche, even when traditional ownership is out of reach. 

Private real estate credit funds provide an alternative financing source for property developers and projects, offering more flexible lending terms than traditional banks. Some funds are delivering net monthly returns ranging from 0.75% to 1.00%, which annualizes to returns that historically exceed historical property capital growth. 

The accessibility varies significantly between retail and wholesale offerings. While many of the highest-yielding private credit funds require wholesale investor status, the growing retail market has opened doors for younger investors. Some retail-accessible funds start from as low as $10,000 to $25,000, while wholesale funds typically require $50,000 to $100,000 minimums. 

This means Gen Z can participate in property markets through credit investment without needing the hundreds of thousands required for traditional property deposits. They’re still investing in Australia’s property sector – just approaching it from the lending side rather than ownership. 

This is where the story gets interesting. Unable to access traditional property investment at scale, Gen Z is increasingly turning to alternative investments that previous generations largely ignored. Private credit funds, for instance, have emerged as a compelling option.

Private credit’s performance is less influenced by public market fluctuations, offering stability, and these investments often provide predictable cash flow: investors receive steady income streams, ideal for income-focused portfolios.

My daughters calling me a “Boomer” isn’t really about age – it’s about recognizing that different times require different strategies. While I benefited from a property market that rewarded simple buy-and-hold strategies, they’re developing sophisticated, diversified approaches to wealth building that may ultimately prove more robust.

Here at Ark Capital, we believe private credit is not just an alternative — it’s becoming an essential part of the modern Australian investment portfolio.

The traditional Australian dream of homeownership isn’t dead, but the path to get there has fundamentally changed. Gen Z’s financial literacy and embrace of alternative investments isn’t just adaptation – it’s evolution.

As investors of any age, we can learn from their approach: diversification, early starting, and openness to non-traditional wealth-building strategies. The economic game has changed, but the goal of financial security remains the same.

Perhaps it’s time for this Gen X “Boomer” to take some notes from his daughters’ playbook.

If you’re an investor, borrower or strategic partner who values forward-thinking leadership, now is the right time to connect.

Let’s talk about where you want to go and how we can help you get there.

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