Although everyone values the freedom to make choices, for some individuals, such as in matters of finance or relationships, decision-making can be complex. For women, in particular, the gender pay gap can seriously impact their ability to attain financial independence and growth their wealth through investment opportunities.
Below, we discuss how the investment property market is empowering women to close the gender pay gap.
What is the gender pay gap in Australia?
The Workplace Gender Equality Agency reports that the wage gap between males and females in Australia is currently 13.3%. This means that for every $1 that men make on average, women in Australia make 87 cents. With the current cost-of-living crisis, the gender pay gap can disproportionately affect Australian women. However, this gap is slowly closing, meaning that women have a growing opportunity to enter not only the housing market, but also a growing opportunity to strive for financial independence through property investment.
In turn, attaining financial security through an investment property also helps to drive the gap in pay equality down!
Female property investment in Australia
A recent report by CoreLogic revealed that in Australia, women continue to lag behind men in terms of home ownership. According to the 2023 Women & Property report released prior to International Women’s Day on March 8th, men were associated with 3.1 per cent more of the analysed housing stock than women. Female-only ownership stood at 26.8 per cent, while male-inferred ownership was 29.9 per cent. Joint ownership between men and women accounted for 43.4 per cent of the properties.
Eliza Owen, the Head of Australian Research at CoreLogic and author of the report, stated that research suggests women are more inclined to invest in real estate when they possess the necessary resources compared to their male counterparts. Eliza comments that “It’s never too late to invest in property and achieve independence. By setting clear financial goals, formulating a strategy, having control over your own money, and acquiring knowledge about personal finance, you can make informed decisions and move towards financial freedom”.
How can an investment property help close the pay gap?
Female-owned investment properties can potentially contribute to women’s financial empowerment and long-term wealth accumulation, which can indirectly help address the gender pay gap.
Here are a few ways investment properties can have an impact:
Financial independence
Investing in properties can provide an additional income stream for women, allowing them to become more financially independent. By generating rental income, women can supplement their earnings and have greater control over their financial circumstances.
Wealth accumulation
Property investments have the potential for long-term capital appreciation, enabling women to accumulate wealth over time. As property values increase, the value of the investment grows, potentially creating a source of wealth that can contribute to closing the wealth gap between genders.
Retirement planning
Property investments can be a valuable component of retirement planning. Owning investment properties may provide women with a reliable source of income during retirement, reducing financial insecurity and dependence on others.
Equity and asset building
Investing in properties allows women to build equity and assets, which may improve their overall financial position. By acquiring and managing properties, women can accumulate assets that have the potential to appreciate in value, leading to increased net worth.
Entrepreneurial opportunities
Investing in properties can provide women with opportunities for entrepreneurship. They may look to start their own property investment businesses, such as property management or short-term rentals, allowing them to exercise their skills and generate income on their terms.
Generational wealth transfer
Property investments can help create a pathway for generational wealth transfer. Through strategic property ownership, women may be able to establish a legacy for their families, providing financial stability and opportunities for future generations.
How much rental income is the property market currently generating?
When evaluating an investment property, most property investors are primarily concerned with two aspects, the capital growth potential and rental yield. Rental yield refers to the percentage return on investment generated by a property through rental income relative to its cost or value.
Currently, in Australia, the net yields (which account for the necessary expenses and costs involved with the property, such as property management fees, maintenance costs, body corporate fees, council and water rates and interest charges) range roughly between 4.0% – 12% pa!
What is the best investment property for female investors?
Like any investor, a female investor will have a unique set of personal and financial circumstances that guide her investment choices, including within the property market. Particularly for those beginning their climb on the property ladder, holding a physical asset can feel more satisfying that other investments (such as shares on the stock market). However, that’s not to say that property investments necessarily reign supreme.
Real estate investing comes with its own set of pros and cons, which means that sourcing the best investment property will come down to the individual investor’s objectives, preferences, strategy and borrowing power. Some choose to seek property investment advice, while other engage in property investing using their own resources and knowledge. One option that appeals too many Australians who engage in property investing are specialist disability accommodation (SDA) properties, offered under the National Disability Insurance Scheme (NDIS).
SDA property investment can empower women and Australians with disability
While property ownership can empower women to strive for financial independence, the opportunity exists for property owners to simultaneously empower Australians living with disability through SDA property investment. Unlike traditional rental properties available on the market, SDA properties are purpose-built housing to incorporate the necessary provision to support Australians living with extreme functional impairment or very high support needs.
The prospective tenants of an NDIS investment property are NDIS participants who have been approved for SDA funding in their NDIS plan. Typically, multiple tenants occupy one property, meaning that SDA properties often come with better continuity and certainty of rental income than other properties.
Also, thanks to Government support of the SDA program, NDIS properties experience exceptional rental yield, sometimes between 10 – 20% pa. From a financial perspective, SDA properties certainly hold the potential to solidify the financial futures of their owners, as well as drastically improve the lives of the tenants that reside within them.
How to finance an investment in Specialist Disability Accommodation
If one of your investment goals is to purchase SDA as your next rental property, then the financing requirements will differ from that of a standard investment mortgage. Mortgage brokers in Australia may not be equipped with the knowledge and experience to ensure that your lending solution satisfies all of the requirements for your investment.
To ensure that you work with industry experts with specialised knowledge in financing investment in NDIS property, reach out to the team at NDIS Loan Experts.
