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Are lower rates motivating more women to buy property?

If lower rates and perceived safety are driving more women to property, what else do they need to know? We ask the experts.

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Many women like to buy property, and I’m one of them.

Indeed in the current environment lower interest rates and rising female wealth are stirring fresh predictions that more Australian women will soon own a bigger slice of the $6.7 billion residential property market.

Dr Andrew Wilson chief economist at My Housing Market says women are likely to gravitate towards residential property in the current environment with record low rates and a perception that property is becoming a safer bet.

“We know women tend to earn less than men, they also live longer and there are a growing number of single women in Australia – these are some of the factors which can lead to more women taking advantage of lower rates to buy property to ensure their own financial security,” says Dr Wilson.

According to a new survey by Allianz Australia, women are more motivated (79 per cent) than men (69 per cent) to buy their first home and are also more interested in growing their wealth through property.

As it stands Australian women own more residential property that they live in men.

The latest data on home ownership collected in 2015-16 by the Australian Bureau of Statistics shows that 60 per cent of women and 56 per cent of men either owned or were buying their homes.

This percentage of female ownership could increase off the back of three successive cuts to the official cash rate to 0.75 per cent by the Reserve Bank of Australia and as a result of rising female full-time and part-time employment.

Lower rates for longer and less regulatory intervention for now, also has some investors thinking that as long as you’re employed, now might be the time to strap yourself into debt.

Variable mortgage rate for loan sizes around $500,000 plus are sitting between 2.7 per cent and 3.3 per cent, according to comparison website Canstar.

Property prices, particularly Melbourne and Sydney, are in catch up mode after a capital city price decline of 10.2 per cent over the past 21-months, according to property data group CoreLogic.

Some economists predict that any recovery in prices will create an opportunity for capital growth and income.

“This will prove more attractive for investors and this may be something that women gravity towards because of a tendency to prefer bricks and mortar real estate over shares,” said Dr Wilson.

For many women, there’s increased spotlight on wealth building, particularly as female workforce participation hits a record high, and awareness of gender gaps in pay and superannuation claim almost weekly headlines.

“Women are traditionally more conservative investors than men and more likely to invest in residential property where they see an immediate and often emotional benefit to asset ownership,” says Amanda Cassar adviser at Wealth Planning Partners.

The general advice to property buyers is:

  • Be clear on what you’re looking from a property purchase, for instance is it for capital growth and to live in, or are you buying an investment for income producing purposes?
  • Identify what areas you would like to buy and can actually afford – and in doing so always consider the location, location, location.
  • Know what type of property you want for instance is it a detached house for a family or an apartment where you would pay strata management fees.

“Property is a long term hold, so if you are hoping to shoot the lights out in the next year or two by flipping, this may be harder to achieve in the current market,” says Ms Cassar.

“Property is usually a seven to ten year hold. While prices may keep slowly going up, hopefully in light with inflation and demand, this is never a certainty,” she says.

While the Allianz research suggests that more women are keen to jump on the property ladder, it also found that a significantly higher percentage of women (39 per cent) than men (22 per cent) reported to feeling stressed out by the process.

“This highlights the importance of women taking care of themselves during the home buying journey,” says Dr Sarah McKay, Allianz’s Wellbeing Advocate.

Dr McKay recommends rethinking your response to stress by seeing the positives in the challenge of buying a home.


This Financy article was first published by Yahoo Finance and has been republished here with exclusive permission.

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