Plus, What is the Australian Wealth Divide (Unequal Division of Wealth)?

Anyone can achieve their financial goals and save the minimum deposit required for an investment property. At least, that is what Australians have believed for decades. However, there is a growing gap in the division of wealth and this wealth divide is growing. Obtaining sound debt management advice can be the difference between reaching financial goals, buying property, and living comfortably well into retirement.

Read on for more on the Australian wealth divide and the minimum deposit required for an investment property.

“If you are a ‘saver’ – you are actually paying to save.”

Tim Murphy, Mentor1 Property

The Australian Wealth Divide
Australia May be Rich but Not all Australians are Living Comfortably

Although Australia is considered rich, only a small number of Australians are living comfortably(*1)

The great wealth divide infographic, Debt Management Advice, Division of wealth

Generational Gap in Wealth

In comparison to the baby boomers, younger generations are entering the property market later and paying off loans slower(*3). As we know, the greatest challenge in buying a new home is saving a deposit. This is where the way the Australian financial (economic) system is causing havoc.

It costs people more to save(*4). Furthermore, those with bad debts are stuck in a cycle of debt management rather than resolution. One purchase that isn’t paid off before the interest-free period expires could be the one decision that prevents a young couple from saving for a house deposit.

Good and Bad Debts

The Australian financial system offers a range of benefits to people with investments and not so much for ‘savers’(*5,6).
Good debts offer something in return. Property ownership is by far, the best example of good debt. Properties have immense potential to grow in value.

Between 2020 and 2021, home values surged by 22%! This kind of increase hadn’t been seen since 1987(*1).
The most common example of bad debt is credit cards. A credit card offers nothing but interest and further debt.

Top Debt Management Takeaways and How Much to Save

If you have no bad debts, keep it that way. Talk to a financial adviser if you need to buy a new car or an expensive household item. They will be able to give you advice on the best way to finance the purchase.

Already have debts? Most Australians have something they are paying off. The goal is to pay it off as quickly as possible. Again, a financial advisor can tell you how you can do this more efficiently. There may even be other financial products that you could use to help pay off the debt quicker.

What is the Minimum Deposit Required for an Investment Property?

Wealth Divide, Debt Management Advice, Division of wealth, minimum deposit required for investment property.

The general rule of thumb is a minimum of 10% of the cost of the home. Budget an additional 5% of the property purchase for up-front costs. Up-front costs include contractual fees, stamp duty, and pest inspections.

Let’s say you were looking at buying a house for $500,000. The minimum deposit would be around $50,000 and the additional costs would be approximately $25,000.
Talk to Tim and the team at Mentor1 Property for professional advice on property investments and how to enter the market.

Phone: 1300 765 811. Email:



*1. UNSW Media. New report: Wealth inequality in Australia and the rapid rise in house prices. UNSW Sydney. 2022.
*2. UNSW Media. One in eight people in Australia is living in poverty, as cost of living pressures increase. UNSW Sydney. 2022.
*3. Trounson, A. Australia's Generational Wealth Divide is Biting. The University of Melbourne. 2017.
*4. Murphy, T. What is the Wealth Divide? 1 Minute Mentoring. Mentor1 Property. Queenscliff, NSW. YouTube video. 2022.
*5. Australian Taxation Office. Interest, dividend and other investment income deductions. 2022.
*6. Australian Taxation Office. Investment income. 2022.