Retirement poverty more confronting to one half of the population
Real estate investment offers women a pathway out of retirement poverty, at a time when a rising number of older females are being forced to rent.
One of the biggest shifts in home ownership demographics in 2022 has been the increase in the proportion of women who own property.
Australian Bureau of Statistics data shows nearly half (47 per cent) of property investors are now women, compared to just 20 per cent in the previous decade.
Female real estate investors, however, do face added financial hurdles.
The wage gap in Australia between men and women means female property buyers require an average of 91 months to save a 20 per cent deposit on the current median dwelling value, compared to 79 months for men.
According to the ABS, 15.7 per cent of Australian taxpayers own an investment property.
Most of these property investors enjoy an average net income below $100,000 with 45 per cent of investors getting by on less than $50,000 per year.
Just over half of all property investors in Australia are aged under 50. Strikingly, the share of those investors aged 60 or more almost doubled from 2010 to 2020.
Property and retirement
Australians are living longer but, unfortunately, the rise in longevity is a surprise for many retirees who are finding they do not have sufficient retirement savings.
There is subsequently a greater number of women facing impending poverty once their working life concludes. This is the ultimate sting in the tail of gender differences in pay and superannuation disadvantages.
With women owning less property than men, they are disproportionately missing out on the recent wealth gains from real estate.
While labour force conditions tightened in the face of historically low-interest rates, the gender pay gap widened during that time.
A super-sized problem
A huge gap exists between the balance of superannuation accounts of Australian men and women.
Australia’s superannuation model is aligned to salary and wages, so therefore works against women in the workforce who are more likely than male contemporaries to have their careers interrupted by parenting and family duties.
Increasing numbers of women are living their final years in poverty, with interest rates rises, inflation and housing shortages only making financial advancement more difficult.
Aside from lower wages, women are more likely to find themselves in casual and part-time work, contributing factors to the gender gap in retirement savings. Women are also more likely to re-enter the workforce following their retirement, often due to financial problems.
These entrenched issues mean more women than men are likely to find their retirement mired in poverty.
Little wonder then that research from the Workplace Gender Equality Agency (WGEA) shows greater numbers of elderly women than men are living in poverty in Australia.
Poverty in retirement
The Australian Council of Social Service (ACOSS) defines poverty as earning 50 per cent below the median income.
University of New South Wales (UNSW) academics see poverty kicking in at 60 per cent below Australia’s average income of $52,338.
One statistic worrying many researchers is the rising number of older women who are renters. This figure was over 180,000 in 2016, double the 2006 level of 90,000 women. Many describe this phenomenon as a tidal wave of women of retirement age teetering on the precipice of experiencing homelessness first-hand.
According to Social Ventures Australia, the volume of at-risk Australian older women potentially facing homelessness is an eye-watering 405,000.
Dire rental affordability
Anglicare’s latest Rental Affordability Snapshot indicates only 0.5 per cent or 386 of the 74,000 properties available across Australia for rent were affordable for a single person on the Age Pension.
Women experiencing homelessness need long-term, affordable housing that is appropriate for their needs. Stable housing is important to ensure good mental as well as physical health. A sense of well-being is a human right.
Increasingly, housing is being seen as a crucial health intervention. Women’s health requirements typically increase as they age and can be exacerbated by homelessness or insecure housing arrangements.
Older women generally have low needs and require nothing more than a safe, affordable, permanent residence to call home.
