CoreLogic’s inaugural Women and Property: State of Play report released on International Women’s Day boosts the evidence of the relationship between the gender pay gap and the gender wealth gap. It suggests addressing gender income equality could support closing the wealth gap as it relates to real estate over time.
The report analysed* a 2021 snapshot of property ownership by gender across Australia and New Zealand, by matching ownership gender with 41.2% of Australian properties, and 72.6% of New Zealand properties.
Milena Malev, CoreLogic International’s GM Financial Services & Insurance Solutions, says “There has been a lot of emphasis on understanding the access to wealth and earnings for women, but much of this has focused on income from wages, salaries and wealth accumulation in superannuation. Using CoreLogic’s extensive property data universe, we sought to understand rates of female property ownership.”
Women appear to lag behind men in property ownership
Eliza Owen, CoreLogic’s Head of Research and author of the report, says “Unsurprisingly, the report found that rates of male property ownership are generally higher than women, but with important distinctions that highlight the relationship between the gender wealth gap and the gender pay gap, and have implications for an institutional response.
“CoreLogic estimates Australia’s residential real estate to be worth over $7 trillion. Given there’s a high level of equity held in real estate, if you don’t own property, that’s a big source of household wealth and security you don’t have access to.”
Implications for retirement
With property ownership being a “pillar” of retirement, outright property ownership reduces housing costs when income has generally dropped, and can significantly reduce the incidence of poverty in retirement. Property ownership can also provide a source of wealth accumulation to help maintain living standards, service health care or aged care costs, or support intergenerational wealth.
Ms Malev says “This wealth gap becomes a particular challenge around retirement, and it’s well documented that if you still have rental or mortgage costs at the time you retire, then you have a much higher incidence of falling into poverty.”
The gender pay gap
Ms Malev says “We know there’s a gender pay gap, and that income is an important determinant of access to real estate ownership. The ABS reports the pay gap is sitting at 13.4%. An important implication of lower earnings among women is the additional barrier to property ownership this can create.”
To highlight how the reported pay gap can impact access to home ownership, CoreLogic did some simple modelling for Australia. Based on the average weekly full time earnings for men and women, it would take women an additional 10 months to save for a 20% deposit on the median Australian dwelling value as at January 2021.
“The implications of this are vast. It means men get access to housing sooner, they have more time in market, and therefore have greater wealth accumulation as well.
“It’s also important to note that Australia measures the gender pay gap by average weekly earnings for full time employees, however women represent 67.2% in the part time workforce and only around 37.9% of the full time workforce. This suggests the true gender pay gap in Australia is actually closer to 30% because of the different composition of men and women in the labour force. In that sense women, particularly single women, may be even more disadvantaged in trying to access property ownership because they need that income to save for a deposit,” says Ms Malev.
Lone person households
Ms Owen says “One of the big findings we get from this report is that the most common type of ownership is two people together, and in most cases it’s a male and a female. That speaks to affordability constraints and infers you often need dual incomes to achieve property ownership.
“The other element of this is that lone households would have less success getting into the property market. What’s important about that, when it comes to women and real estate, is that women make up over 60% of either single-parent or lone adult households. Yet at the Australia-wide level, sole property ownership among women is less than their male counterparts, which means women are over represented in lone households but they’re underrepresented in property ownership.
“The core of this analysis and its findings is that it’s all about wealth inequality and income inequality, and that doesn’t just span between men and women, it spans among women as well – including those that are single, sole parents or part time workers.”
Key findings for Australia & New Zealand
- Unsurprisingly, there were higher rates of property ownership among men than women in both Australia and New Zealand. Property exclusively belonging to owners identified as female represented 26.2% of those analysed across Australia, compared with 20.3% of the properties analysed across New Zealand.
- Property exclusively belonging to owners identified as male represented 29.9% of the properties analysed across Australia, compared with 22.9% of the properties analysed across New Zealand.
- In both countries the most common type of ownership was ‘mixed gender’ ownership, where both men and women had ownership of the property. This accounted for 56.8% of properties in New Zealand, and 43.9% of properties in Australia. The mix of male and female ownership implies two or more incomes were used to buy the property.
- The high rate of mixed gender ownership in New Zealand means that women have a higher portion of total (sole or joint) ownership (77.1%) compared with Australian women (70.1%).
- Across Australia and New Zealand, rates of female ownership of property tended to be higher in major cities. In Australia, female property ownership is higher where dwelling values are higher, and incomes are typically higher. This reinforces the idea that property ownership is ultimately a function of income, and fixing the gender wealth gap in property could be about fixing the gender pay gap.
Key findings for Australia
- Property ownership rates among women have a positive correlation with dwelling value, in that areas with more expensive housing were found to have higher rates of female property ownership. For men, it’s a negative correlation, so the less expensive the area, the higher the rate of male ownership.
- In Australia, Greater Melbourne and Regional Victoria were the areas with the highest level of gender parity in ownership rates, with less than 2 percentage points separating male and female rates of ownership. Melbourne also had the lowest rates of properties owned by mixed genders at 38.4%.
- The largest discrepancy between exclusively male and female ownership in property was across Regional Western Australia, where female owned property represented 19.8% of those analysed compared with 29.3% owned by men.
- Of the 76 SA4 markets analysed, there were 7 sub-markets of Australia where rates of exclusively female ownership were higher than the rate of exclusively male owned properties. The biggest difference was across the ‘Inner South’ region of Melbourne, where 32.6% of property is exclusively owned by females, compared with 27.6% of properties analysed being exclusively owned by men, and 39.9% having mixed gender ownership.
- The highest rates of exclusively female ownership was in the Eastern Suburbs of Sydney, where the properties analysed saw 34.8% exclusively owned by women versus 31.7% exclusively owned by men.
Ms Owen says “The core of our findings come back to income. The areas where women have higher rates of property ownership, also generally have higher median household incomes. This reinforces the view that women can actually have a higher propensity to buy property than men, therefore women with higher incomes have more success.”
What the findings mean for Australian and New Zealand institutions
The findings in this report have several implications for stakeholders across real estate, finance and government, as well as many businesses generally.
Ms Malev says “Property ownership and building wealth are inextricably linked to income, so a long term policy to address the gender pay gap and gender wealth gap must include a plan to reach pay parity across genders.
“For government, there are implications for the provision of social support. The gender pay gap appears to be creating a barrier for entry into the property market among women, and this is amplified for single or lone adult households. Women are more likely to exit property ownership after the dissolution of a marriage and that’s where we see women over 50 among the highest growing rates of homelessness in Australia.
“Savings and investment solutions from lending institutions for those on lower and/or single incomes can help provide a leg up into the wealth accumulation that is associated with property ownership,” says Ms Malev.