By Kate Hill, Adviseable
Did you know that single women, on average, invest in property at a later age than men?
According to research by ME Bank, single women are buying property at an average age of 34, compared with 32 for single men.
I must admit that these ages surprised me, for both sexes, as ideally people should be buying their first property much earlier, so that they can benefit from more time in the market, which is when the magic of compound growth occurs.
However, women especially should be considering buying a property sooner so that they can better secure their financial position and independence later in life – regardless of whether they choose to partner up or not.
Another reason why women should try to buy when they are younger than their mid-30s is that this is often also the age that they decide to settle down or have children.
While there have been marked improvements in the division of labour in family households over recent decades, women still remain the primary caregivers of young children, which usually means a period of time out of the workforce.
And it is during this child-rearing period that women usually start to fall behind men in terms of the income that they will earn during their lifetimes as well as their superannuation balances at retirement.
Lower income deterrent
While the percentage of women buying property solo has been increasing over the past few years, the fact that they often earn lower incomes than men may deter them from investing.
In fact, according to the Australian Bureau of Statistics, at the end of last year, women earned between 11 and 15 per cent less than men on average, depending on whether they worked in the public or private sector.
However, the average full-time weekly earnings for women of about $1,600 per week across both sectors does provide the financial capability for most females to purchase a property in their own right.
That property may be in a more affordable state to where they currently live or it may be a smaller dwelling than what they had envisaged, but they will have secured a property and it will be theirs alone.
Unfortunately, lower incomes can also mean it takes a longer time to save a deposit, with CoreLogic analysis finding that it could take an extra 10 months for women to save a decent deposit compared to men.
These facts are likely some of the main reasons why single women don’t invest in property until they are nearing middle age.
That said, there does seem to be a different mindset amongst would-be male and female property buyers, based partly on biology and their likely future lifestyles.
While it is certainly not set in stone that young women today will have children of their own one day, it is probably something that most of them have thought about at some point.
The financial ramifications of having children is not lost on them, so many young women may be hesitant to buy solo because of what the future may hold for them as mothers.
Some women also may have lower risk profiles when it comes to their finances – even though it’s often females who manage the household budget.
But, being worried about taking out a mortgage on a property when they are young, shouldn’t even be a concern to them.
Rather, in an ideal scenario, they would understand that property investment is a low-risk wealth creation strategy.
Indeed, financial literacy is a vital topic that is becoming more prevalent in schools, so that all young people have a better understanding of money.
And how they can use it to their advantage – and make it better work for them – in the years ahead.
If all young people, and especially women, understood the basics – including money management and how to improve their financial futures – then it would no longer be necessary for special grants to be established to help them into the market.
For example, the new Family Home Guarantee for single parents, which will support up to 10,000 single parents with dependants over four years, commencing on 1 July.
This grant will not only help first home buyers, but also single parents attempting to re-enter the housing market after divorce and family breakdown.
You see, if young women had purchased a property on their own and continued to own it independently, then their options and financial situation in the future would be all the better for it.
By Kate Hill
(Main image credit: Freepik)