30 Mar Why aren’t more Australian women investing in property?
CoreLogic’s second annual report into female property ownership, released in March 2022, has found that it continues to be the case in Australia (and New Zealand) that women do not have as great a stake in the property market as men.
According to findings in Women & Property: One Year On, this has in turn meant that women have not profited to the same extent as men from the recent Australian property boom, a fact that is even more marked in the light of Australia experiencing record annual growth in house prices in 2021 fuelled by historically low interest rates.
How many women own property in Australia?
The report found that 26.6% of Australian property is owned by women, as opposed to 29.9% level of male ownership.
The differential is even more marked when it comes to buying an investment property. According to the data contained in the report women owned 29.1% of Australian investment properties, against the 36.4% owned by men. Digging deeper into the data, it was found that women own 24.0% of detached houses, with men owning 28.5%.
However, overall, there has been a slight increase in the number of women purchasing property in Australia, with 28.3% of property purchases in 2021 made by females, rising from 27.4% in 2020 and 27.3% in 2019.
How does property ownership impact on wealth and financial well-being?
Over the long term, the gap in property ownership levels between men and women has also been shown to have a significant and lasting impact on the ability to create and maintain wealth.
As described in Women & Property: One Year On, the Reserve Bank of Australia (RBA) has found that 55.6% of household wealth is derived from property. Therefore, rapid and substantial increases in housing prices not only impact on individual and family financial well-being, but it also brings a vast range of associated benefits to the wider economy.
Crucially, the report further suggests that property ownership plays a significant factor in financial health and well-being in retirement. Owning property significantly reduces the likelihood of retirement poverty, with 6% of Australian retirees who are home owners, as opposed to 42% of retirees who rent. This is because the housing costs are lower, while owning property also provides access to funds through equity.
The growing inequality in Australia between those who own property and those who don’t
Women & Property: One Year On also highlighted the ways in which the 2021 housing boom has contributed to wealth inequality in Australia. According to CoreLogic, house prices across Australia increased by 22.4% in the twelve months to January 2022 (the biggest single year of growth since 1989),
Taking median house prices into account, this meant an average capital gain of $130,000 for property owners in Australia, far in excess of income growth during this time. This in itself contributed to wealth disparities, but it also gave existing property owners further property purchasing power through increased equity. CoreLogic suggests that this has also helped to prevent greater numbers of women from investing in property in Australia.
The report also suggests that the gender pay gap has contributed to there being fewer women in the property market. This has meant that men on the whole have greater purchasing power, and more importantly are able to accumulate the sum required for a deposit more quickly than women — one of the single biggest barriers to the acquisition of property (either as an owner-occupier or a property investor — as shown in the graph below.
Source: CoreLogic, ABS.
Assumes a flat savings rate of 15% of gross annual income. Incomes are based on the full time, ordinary hours, average weekly earnings measure for men and women, and adjusted by historic average growth in the wage price index. Assumes a 20% deposit on a static median dwelling value of $709,803.
How buying an investment property helps women to take charge of their financial futures
The most important takeaways from this new CorelLogic report are that, although there has been a slight increase over the past two years, the number of women who buy investment property in Australia remains below that of men.
In addition, not owning property to the same degree means women have not benefitted from the property boom in a comparable way to men. This has also meant that the capital owned by women has not grown at the same rate, and so this has then contributed to women not being able to enter the market and buy property, either as an owner occupier or as an investor.
Find out more about property investment in Australia for women
As experienced property strategists, we have helped many Australian women of all ages to take a more proactive approach to their financial future by investing in property.
We are by your side to guide you through your entire investment journey, and help you to gain exclusive access to new developments in areas of the country where there is likely to be the most significant growth in prices and demand, and which aren’t open to individual investors.
If you want to find out more about growing your wealth and increasing your financial independence, call Danielle Charlton on 0411 268 795, or book an online property strategy session today.