Ownership imbalance in property

Property ownership is an important facet of wealth and lifestyle across Australia and New Zealand. Of particular importance is the role property ownership plays as a “pillar” of retirement across both countries.

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Outright home ownership in later years reduces housing costs at a time when individuals generally have lower income and can significantly reduce the incidence of poverty in retirement. Even ownership of investment property has been shown to reduce the incidence of poverty among older households in Australia. 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.

"The latest ABS data reported the difference in full time average earnings between adult women and men at -13.4 per cent across Australia.”

In Australia, CoreLogic estimates the residential housing market to be worth around $A7.5 trillion as of February 2021, and the latest Reserve Bank of Australia (RBA) figures suggest the value of housing accounts for 52.6 per cent of household wealth. In New Zealand, the overall value of the housing asset class was estimated at more than $NZ1.3 trillion, with equity of over $NZ1 trillion. In the year to June 2019, Stats NZ reported households who owned or partially owned their home had a median net worth of $NZ558,000 compared with $NZ39,000 for those that did not.

Unfortunately, property ownership is not created equally. For example, lower income households have been comprehensively documented as having lower rates of home ownership. As a result, it stands to reason a disparity in wealth and incomes between men and women has a relationship to gender disparity in the ownership of property.

One facet of this relationship would be the earnings of women in Australia and New Zealand compared with men, also known as the gender pay gap. The latest Australian Bureau of Statistics (ABS) data showed the difference in full time average earnings between adult women and men was 13.4 per cent across Australia. This was based on the seasonally adjusted series, as the trend has been unavailable through COVID-19.

An important implication of lower earnings among women is the additional barriers to property ownership this can create. For example, based on the average weekly full time earnings for men and women in Australia, it would take women on this average income an additional 10 months to save for a 20 per cent deposit on the median dwelling value as at January 2021, compared with the average full time earnings for men.

Ownership imbalance

New data from CoreLogic suggests greater rates of property ownership among men than women in both Australia and New Zealand. Properties exclusively belonging to owners identified as female represented just 26.2 per cent of the properties analysed across Australia and 20.3 per cent of properties analysed across New Zealand.

Among the greater capital city statistical areas, male property ownership outstripped female property ownership based on the inferred gender matching. 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 a mix of males and females, at 38.4 per cent.

The largest discrepancy between exclusively male and female ownership in property was across Regional Western Australia, where female-owned property represented 19.8 per cent of those analysed compared with 29.3 per cent owned by men.

Part of the trends across these regions may be associated with the demographics of the area. Across regional WA, ABS census data suggest men make up a majority of the population, albeit a slim majority of 51.7 per cent. The other factor may be the nature of workforce composition across the regions, with higher-paid jobs in regional WA typically concentrated in more ‘male dominated’ fields such as mining and construction.

Despite having a lower rate of exclusively-female ownership than in Australia, 56.8 per cent of properties analysed in New Zealand were owned by both male and female owners. This means women have at least partial ownership of 77.1 per cent of properties, which is higher than the ownership of women across Australia.

At the regional level, Auckland had the highest share of female-only property ownership, at 23.7 per cent. The Gisborne Region was next, at 21.2 per cent, closely followed by the Wellington Region (21.0 per cent).

In more rural-oriented areas of New Zealand, such as Otago and the West Coast, the mix of jobs are typically more male dominated, which may account for a relatively low rate of exclusively female ownership. These industries include farming, forestry and fishing.

Gendered policy needed

Based on the gender pay gap across Australia and New Zealand, there generally appears to be a greater barrier for entry into the property market among women than men. Among single households, there is also a large discrepancy in ownership rates, which highlights the challenge of property ownership on a single income. Savings and investment solutions for those on lower incomes from lending institutions can help provide a leg up into the wealth accumulation that is associated with property ownership.

Alternatively, and particularly in the short term, there is a need to maintain or increase provisions for those who do not have access to the property market. This includes social provisions for women who may have recently exited a union - and property ownership as a result - and an increase to pension provisions for those who have been unable to enter property ownership.

A final observation is that property ownership and the accumulation of wealth is linked to income. A long term policy to address rates of female property ownership needs to look to closing the gender pay gap. Pay parity in this sense is linked to wealth parity and closing the gender pay gap would support outcomes of self-provision for retirement.

Eliza Owen is Head of Research Australia at CoreLogic

Click here for more information about CoreLogic’s Women & Property report in Australia and New Zealand

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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