An exploration of female home ownership patterns in Australia

18th European Real Estate Society Conference

Eindhoven, 15th – 18th June 2011

Valerie Kupke & Peter Rossini Centre for Regulation and Market Analysis

University of South Australia&

Sharon YamCentre for Accounting, Governance & Sustainability

University of South Australia

Slide 2

More women looking to buy a home

• In Australia most important factor contributing to housing demand is the growth in the number of households

• Lone person and single parent households projected to grow fastest - both households significantly over represented by female headship

• Women associated with longer life spans, increasing rates of marriage break down, higher levels of workforce participation and increasing levels of wealth

• Therefore significantly more women will be looking to purchase homes on their own

• Yet studies on women and housing are rare

Slide 3

Benefits of home ownership

• Australia’s welfare and housing polices are predicated on the perceived merits of home ownership

• Welfare benefits, both during employment and on retirement, based on household investment being extended over time through home ownership

• For women in Australia home ownership will be an important determinant of their ability to secure adequate living standards in old age

Slide 4

Challenges to purchase

• Entrenched lower rates of pay - on average 17 % less than men which sets them up for a life time of financial inequality worth up to $1 million over their lifetime, concentrations in lower paid occupations

• Women less wealth, less choice about their lifestyles & significantly lower superannuation than men

• Career breaks - preoccupation with mother and carer roles, childcare costs and availability

• Conservative attitude of lenders and agents

Slide 5

Preliminary analysis

• First stage - this paper presents a preliminary analysis of key characteristics and changes over time of female purchasers including first home buyers in Australia for two time periods, 1998 and 2008

• Using national survey data collected by the Australian Bureau of Statistics (ABS)

• All of the results reported have been weighted using an ABS derived weighting factor

• Sex of household reference person identified in the survey & used to indicate household headship – defined as significant decision maker in the household

• Second stage of the research will be to identify the propensity to purchase by female headed households.

Slide 6

Initial questions

Initial questions•Do female home owners face greater affordability problems?•Are female home ownership rate over or under represented in certain household types?•Is there significant variation in female home ownership rates between city and country?•Do female purchasers pay more for certain dwelling types?

Slide 7

Period of house price & rental increase

20

21

22

23

24

25

26

50

70

90

110

130

150

170

190

210

230

250

Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

% In

com

e o

n R

en

t

HIA

Aff

ord

abili

ty I

nd

ex

HIA First Home Buyer Housing Affordability Index & Proportion of Median Income on Rent 1998 - 2008

HIA First Home Buyer Housing Affordability Index

Proportion of Median Weekly Family Income spent on RentHousing less

affordable

Slide 8

Home ownership rates in Australia falling

Headship Female - 1998 Female - 2008 Male - 1998 Male - 2008Owner without a mortgage

40.93% 34.59% 38.58% 32.10%

Owner with a mortgage 25.14% 29.78% 34.36% 38.60%

Home ownership rate

66.06% 64.37% 72.93% 70.70%

Renter30.98% 33.27% 24.96% 27.48%

Other2.95% 2.35% 2.11% 1.82%

Home Ownership Rate

Slide 9

Female households face affordability problems

Sex of HH reference Mean t Sig. (2-tailed) N

Male $1,903 4897501

Female $1,271 3140152

Male $397,809 635526

Female $365,656 354063

Male $46,263 178889

Female $43,824 89613

Male $191,604 1558483

Female $167,736 764982

Male $429 1530965

Female $379 745643

Total weekly income all sources (corrected)

.000

.000

.000

.000

.000

529.659

Purchase price of dwelling (for dwellings purchased/built in the previous 3 years)

Size of home deposit

Amount owing on mortgages to purchase/build - HH

Weekly mortgage repayments to purchase/build - HH

56.075

11.016

122.186

98.371

Slide 10

Female home ownership over represented by certain household types

Slide 11

Yet female buyers may be outbidding males for certain dwelling types

Slide 12

Many female FHBs are single income households

Slide 13

Separate dwellings still popular with FHBs

Slide 14

Most Female FHBs buy in the city

New South Wales Victoria Queensland

South Australia

Western Australia Tasmania

Capital city 63.0% 77.6% 47.6% 80.2% 72.8% 32.5%

Balance of State

37.0% 22.4% 52.4% 19.8% 27.2% 67.5%

Capital city 59.4% 79.8% 65.1% 78.0% 92.2% 69.6%

Balance of State

40.6% 20.2% 34.9% 22.0% 7.8% 30.4%

Male

Female

Location

First Home Buyers 2008

Slide 15

Initial answers

Initial questions•Do female home owners face greater affordability problems? YES•Are female home ownership rate over or under represented in certain household types? YES•Is there significant variation in female home ownership rates between city and country? YES•Do female purchasers pay more for certain dwelling types? YES

Slide 16

Female participation challenged

• Out of this analysis key characteristics that will need to be investigated to explain female propensity for home ownership include children, income and particularly the prices and affordability of particular dwelling types

• Any significant mismatch between the current housing stock and its pricing with what women want to, and can afford to buy, will further threaten their participation