How more women can own a property

Rewind history 50-odd years and the idea of single women leading the property market would likely have made bank managers laugh out loud — after all, just a few decades ago, women required a male guarantor to even take out a loan. Things have certainly changed, with research from the Australian Bureau of Statistics showing that 60 per cent of Aussie women own their own home compared with 56 per cent of men, and the Westpac 2018 Home Ownership Report discovering that 36 per cent of women, compared with 28 per cent of men, were considering buying a home in the next five years.

“Despite some women facing unique challenges, such as differences in wages, taking time off to have children and part-time employment, females are entering the property market at a faster rate than men,” confirms Kate Britton, head of portfolio management, Home Ownership at Westpac.

And while Millennial women are among the fastest-growing category of home owners — 26 per cent of women under 35 have a mortgage compared with 20 per cent of men — solo female buyers aren’t all savvy 20-somethings building an investment-property portfolio. Single career women, divorcees and retirees are among those focused on snapping up properties. “Over the past six to 12 months, 25 per cent of the properties I’ve sold were to single females. It’s a pretty big chunk,” notes Sydney sales agent Danielle Dewhurst, from McGrath Estate Agents. “In that particular period, they were all young or middle-aged, but in the past, a big demographic has been females at retirement age looking to downsize.”

So why the push for property? “I think women are wired for stability,” explains financial adviser Helen Baker. “Having your own home where you can do the things you want without landlords checking on the property and the certainty of not having to move — that’s a big attraction for owning your own home.”

Britton agrees, adding owning your own home also provides a sense of accomplishment. Women are willing to work hard for it, too, with Westpac data showing that among first-home buyers, 55 per cent of women are prepared to make lifestyle sacrifices to save for a home, compared with 39 per cent of men.

“We also know that investing [in property] has been a popular investment strategy for Australians for many years, driven by a history of rising property prices, potential tax advantages and the potential to generate rental income.”

Flying solo

While the property market has started to dip, Baker says real estate remains a solid investment — as long as you make a ‘comfortable’ choice. “I think women take less risks, so they’re less likely to get in over their heads with a big mortgage,” she says.

“With interest rates being so low, a lot of people are finding mortgage repayments are less than their rent, or pretty close to it,” Baker says. The biggest challenge for solo buyers is putting together a sizeable deposit. The median home price in Australia ranges from $478,000 in Hobart to more than $1 million in Sydney, and a 20 per cent deposit can be a tough task on just one income.

“With the rise in property prices over the past few years, saving for a deposit has become more difficult, however our research is showing that Australians are feeling more optimistic about their home-ownership goals,” says Britton. “It can be a long process, and it’s important to get expert help early on so you can understand your options and set clear, achievable goals for yourself.”

Alternative avenues such as ‘rent-vesting’ (where you rent in a convenient location and buy an investment property in an area you can afford) or teaming up to buy can also help single women get on to the property ladder sooner. “Particularly if it’s their first home and they’re quite young, they may buy with a sibling or a friend, and that gets them into the market together,” explains Baker. “When you look at places like Sydney where a unit may be $700,000, it’s a big commitment for one person. But if they can get a two-bedroom that isn’t too much more, and share, that may be an opportunity.”

Older buyers in their 50s or 60s have a different set of considerations. “It’s a trade-off between whether they can afford the home and how it’ll work with their other investments, such as superannuation,” Baker says. “Otherwise, they may have a house, but can’t afford [much else]. The problem is at the other end if it isn’t paid off and they haven’t built for their retirement as well.”

Forward thinking

Being a solo buyer can make decisions easier, but it also means shouldering the burden of finding the perfect property alone.

“I think [female buyers] are certainly empowered, but I think there’s still some trepidation,” says Dewhurst. “They tend to come back multiple times to look at the property to really make sure it’s the right one.”

Carefully considering every step is a smart move, says Britton, who says it’s just as important to factor in ongoing costs as well as the initial outlay. “Some of the longer-term considerations are increasing strata fees, ongoing maintenance, vacancies and the property cycle, along with any lifestyle changes, such as a growing family, travel or a career change,” she explains. “We encourage customers to have some flexibility in their finances to be best prepared for any unforeseen circumstances.”

Baker recommends having an emergency fund of around three months’ worth of bills, obligations and fun money as a back-up, as well as income protection. With these boxes ticked, she says women should feel confident about tackling the property market solo. “I think women are good at managing money. If they take wise steps that they’re comfortable with, they’ll make it work.”

“It was really important to me to have a home”

After separating, Lucy Good, 44, a Noosa-based website founder, wanted a stable home for herself and her two daughters.

“When my husband and I emigrated to Australia from the UK, it seemed like a good idea to rent and try different areas. But I really wanted to buy because it was really important to me to have a home. I needed a space that was mine. So, when we split up, I decided I wanted to buy.

I had money from our settlement but it wasn’t enough for a full deposit. At one point I was working full-time as a marketing manager, and I was also contracting and setting up my own business [the single-mum website Beanstalk] as well as Uber driving. Looking back, I don’t know how I did it, but it was just a temporary arrangement to get the money that I needed.

I was lucky to have a good real-estate agent who took me under his wing — the property I bought wasn’t even on the market! It’s a three-bedroom townhouse, which is perfect for me and my girls. We really love it and it means so much to us.

It’s definitely made me feel more financially secure and the value has increased substantially since I bought it. As long as you don’t overextend yourself and borrow too much, it’s a welcome security and possibly even something for my girls when they’re older.”

“You need to be really diligent with saving”

A strict budget put Sydney contracts administrator Christelle Tuyau, 28, on the fast-track to her first property.

“My dad always taught me the rule ‘save 90, spend 10’. I worked seven-day weeks in two jobs — in construction and retail — to help me save for travel and a deposit. The year I bought my investment property, I sacrificed the travel time to save extra. I’m lucky enough to be living at home, so some costs come a little easier for me, but the deposit was purely me. I needed around $50,000 to buy the house, but that involved paying lender’s mortgage insurance.

From the beginning, I wanted to convert the garage into a granny flat, which I did last year, and it’s like its own little home, with its own access and driveway. My property is negative geared, but since I built the granny flat, it’s pretty much break-even now. My end goal is to build a property portfolio and potentially do flip projects later on.

It’s really hard having to save with the cost of living in Sydney. I’m still working the extra job on weekends. My friends think I’m crazy, but I’ve made it fit in with my lifestyle. You need to be really diligent with how you save. Buying property can seem unachievable, but if you set some key goals and strategies, it can be done. It just depends how badly you want it.”

5 must-dos before you buy

Set your budget

“One of your first steps is to understand your borrowing power,” says Britton. If you’re looking to upsize your house, and want to know what equity is in your current property, you can use the Westpac Next Move Calculator to help you set some goals.

Start saving

“Begin putting aside your mortgage repayments now so you get into that cycle,” tips Britton. “Then you’ll get a good feel for whether that’s a suitable level of repayment for you within your current lifestyle.”

Do your research

“Research the areas you like,” tips Dewhurst. Consider amenities like transport, schools and shopping centres, and get to know the average property prices in the area.

Recruit an expert team

It’s worth paying top dollar for a good conveyancing lawyer and building and pest inspections, says Baker. “Apart from superannuation, a house is probably the biggest investment you’ll ever make, so make sure you protect it.”

Get pre-approved

Before you start shopping in earnest, see your lender for ‘approval in principle’. “This allows you to look for properties and narrow your search with confidence as you’ll know the maximum amount you’ll be able to borrow and what deposit you may need,” Britton explains.

To make your next move as easy as possible, head to westpac.com.au/nexthomeguide.