The Great Wealth Transfer: the shift of assets to the youth

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If TikTok is anything to go by, then Gen Z-ers (aged 13-28 this year) are all about finding their “main character energy”, a viral phrase that means taking charge of your life and living it to the fullest. With the biggest-ever generational transfer of wealth at hand, they will soon be able to do exactly that. Gen Z, millennials and Gen X currently control just 3% of the world’s wealth – but, as they inherit over the next quarter of a century, that percentage is projected to rocket to 60%, according to studies by The Future Laboratory, a strategic foresight company, and the Modern Affluence Summit. 

This Great Wealth Transfer (GWT) will see an estimated $85 trillion pass from the baby-boomer generation (aged 61-79 in 2025) to their successors by 2048, according to Cerulli Associates. The highest echelons of wealthy families will account for 42% of this fortune: ultra-high-net-worth households in the top 1.5% will transfer about $35.8 trillion to their heirs.

“Boomers form the wealthiest cohort in history, with huge spending power – they have benefited from the liberalisation of trade in the middle part of the 20th century and rocketing postwar economic growth, as well as inheritance,” says Kelcie Sellers, Savills World Research associate director. Tellingly, the average net household worth for American boomers is more than $1.6m, according to Federal Reserve data. “Now they are turning their minds to succession planning, looking at their assets and trying to determine the best way to pass on that legacy to their children and grandchildren,” says Sellers.

And when large estates and farms are involved, expert advice and forward planning become even more crucial.

BOOMER BOTTLENECK
One of the biggest problems in real estate today is boomers holding on to homes, creating a supply shortage for Gen X, millennials and Gen Z, according to Adrian Benosiglio, real estate tax partner at accountancy and tax firm RSM UK. Restrictive planning rules in the UK have exacerbated the situation, he says, and the US and Europe face similar bottlenecks. 

Savills research proves the point, revealing that over-60s in the UK hold almost £2.9 trillion in their main homes – well over half of total owner-occupier wealth. “The extent to which this is unlocked over the next couple of decades is crucial to future patterns of home ownership,” says Lucian Cook, head of residential research at Savills. “The build-up of boomer wealth is a function of the great property-owning generation living longer, with little financial or emotional incentive to downsize. Currently, they make up less than 20% of movers.” 

In the US, boomers own more homes with three or more bedrooms than any other generation, according to the mortgage and real estate brokerage Redfin, with 28% being empty-nesters. “Boomers hold quite a bit of their wealth in property, and most still live in their primary residence, the value of which has appreciated dramatically in a way younger generations haven’t seen,” says Sellers. 

Many boomers stay in large homes even when their children have moved out, heading back only for family gatherings. It makes sense for parents to do this: they acquired their property when housing prices and interest rates were lower, and many will have paid off the mortgage. Tax considerations also make it unappealing for boomers to sell their spacious empty nests, so they often use the extra bedrooms for hobbies or to welcome visiting family and friends. 

This supply bottleneck has pushed up prices, and it doesn’t help that millennials are generally less well-off than their predecessors. This brings to mind the acronym HENRY (High-Earning, Not Rich Yet), used to describe a cohort at whom their less high-achieving peers might look with envy. A University of Chicago study found that while the wealthiest millennials have 20% more wealth than the richest boomers had, high inflation is cancelling out this advantage. So, while the GWT is heading in their direction, their spending power still might not match that of their parents at the same age.

“Even wealthier millennials can be found living in rented accommodation or in a smaller apartment than they would want,” says Sellers. The home ownership level for millennials in 2024 was 54%, lower than for all previous generations in their age bracket. 

Those who can buy frequently do so with the help of the “Bank of Mum and Dad”. A Merrill Lynch report showed that in 2021, 51% of millennial first-time buyers were given financial help, while 18% of millennial and Gen Z first-time buyers were gifted the home outright – or given the family house when their parents downsized. In the UK, Savills estimates that the Bank of Mum and Dad provided funds of £9.6bn in 2024.

When the boomers pass on the baton, it will free up a huge amount of property, especially family homes. The question is, with a shift in preference for lifestyle over ownership, will younger millennials and Gen Z want to live in them? 

MILLENNIAL MINDSET
“Many wealthy millennials are less wedded than their predecessors to some of the traditional mile-markers of adulthood,” says Sellers. She suggests that for this cohort, living in smaller homes or rented accommodation is not always about making do: “Having come of age straddling the analogue and digital worlds, they prioritise lifestyle, travel, community and freedom.” Millennials and Gen Z are also known for exploring different careers, rather than climbing a traditional ladder. They are sometimes called the Slash Generation – as in “model/DJ” – because they might combine two jobs at a time.

“That footloose mentality means wealthy millennials are more inclined to venture into new areas and pioneer emerging prime locations,” says Cook. “In London, that has opened up areas such as Clerkenwell, Shoreditch and Victoria Park.” Further afield, this might explain the influx of wealthy young Spanish-speakers from Central or South America now living in Madrid or Miami, or the transplanting of millennials from all over the world to Dubai. 

These generations are also more likely to move abroad than their predecessors, while increasing numbers are digital nomads or the more senior executive nomads. Of the 18.1 million American digital nomads last year, 64% were millennials or Gen Z, according to a study by MBO Partners, which helps businesses to find independent workers. 

This trend has a significant effect on the types of property they seek. Turnkey, urban, low-maintenance luxury new-builds are in demand among younger generations, says Sellers, with gyms, security, concierge services and high-spec bathrooms and kitchens expected as standard. In Manhattan, The Reserve, a luxury apartment tower, has a wellness room, a podcasting studio and a co-working space. In London, next to Tate Modern on the South Bank, developer Native Land is creating Bankside Yards, a cluster of eight buildings billed as the UK’s first major mixed-use fossil-fuel-free development – where residents will have access to a content creation studio.

Branded residences, which can often be let and monetised in a management pool, are also popular with Gen X and older millennials, Sellers says. They are “viewed as trophy assets by prospective buyers among the global high-net-worth population”, according to Savills Branded Residences analysis. About 700 such residences exist globally, with a similar number expected to be completed by 2031. Prolific brands include Four Seasons, The Ritz-Carlton and St. Regis.

FAMILY LIFE
Children, or the lack thereof, play a big part in real estate choices. Many younger people are choosing not to have children, which will give them the ability to work remotely and freely, with lower overheads.

“When it comes to the children question, there is a distinction between millennials and Gen Z,” says Dan Hastings-Narayanin, who is deputy foresight editor at The Future Laboratory. “Millennials are mainly meeting those traditional life milestones, but they are doing so later than the previous generation – getting married, buying a house and starting a family, but in their mid-thirties to early forties. Gen Z seem to be differently wired, and parenthood is not necessarily a goal for them. Many are happy to be single.” Data from Pew Research shows that 33% of single male Americans and 39% of single American women aged 18-39 have no interest in dating. Meanwhile, the share of unpartnered adults aged 25-54 has risen from 29% in 1990 to 38% in 2019.  

In the property market, this might mean a preference for rentals over purchases. Renting as a concept is more acceptable among younger generations than it was for their parents, Hastings-Narayanin points out, and this has prompted a surge in build-to-rent development. “About 50% of build-to-rent development is now single family homes, compared to approximately 10% two or three years ago,” says Stacy Eden, head of real estate and construction at RSM UK.

Millennials and Gen Z also tend to be more concerned with green causes and their environmental footprint. And while classic boomer homes may not always be their cup of tea, in the next decade such properties will have huge sway, says Lucian Cook. “It will offer younger people the chance to trade up by selling the family home and buying something more to their taste.” 

It seems tastes in property are shifting: instead of a pure asset, it is now seen as enabling a convenient, free and enjoyable lifestyle. In other words, the wealth being transferred might keep on moving as a lifestyle choice. “People may be thinking, ‘I want to travel, I want to take any work opportunity in any part of the world’, and renting offers that flexibility,” Sellers says. “‘How do I make a life that allows me to build wealth while also giving me joy?’”

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