Daughters are less likely to get help from parents to buy their way into the Australian property market and women will bear the most pain from the Reserve Bank’s sharp increase in interest rates.
Research to be released today from the Australian Housing Monitor shows the proportion of women drawing on their parents or their partner’s parents for financial assistance to buy a home has declined over the past six decades.
Parents have increasingly gifted or loaned money to their children to help them into a property market that, despite last year’s fall in prices, is still among the most expensive in the world.
The housing monitor, which surveyed more than 4200 people, found more than two in five first-time buyers needed a financial lifeline from “the bank of mum and dad” to get into the market.
Between the start of this century and 2019, daughters received two-thirds of the assistance that was delivered to sons.
Last decade, more than 47 per cent of men received a handout from their parents or their partner’s parents. Thirty per cent of women got help.
As interest rates tumbled at the start of the pandemic and state governments offered help to first-time buyers worth up to $89,000, the gap between daughters and sons narrowed – but women received 90 per cent of the assistance that men received from parents.
Matt Lloyd-Cape, director of the Centre for Equitable Housing, said women were clearly treated differently by the bank of mum and dad.
“The gender gift gap identified in our Housing Monitor is shocking, but perhaps it shouldn’t be: there’s lots of evidence that suggest that sons often receive more through inheritance and more financial help from their families than do daughters, in Australia and internationally,” he said.
For those who bought in the 1980s, about 15 per cent of people tapped the bank of mum and dad but the gap between sons and daughters was much narrower than today.
Even among more recent generations, the research found large gender differences. While almost 33 per cent of male millennials received parental handouts, 21 per cent of females in the same age group had help.
There was a smaller gap among Gen Z – those born between 1996 and 2010 – but men (31.3 per cent) were still more likely than women (25.7 per cent) to get parental support.
The research also revealed the sharp increase in interest rates by the Reserve Bank since May last year is likely to hurt women more than men.
It found more than 45 per cent of men are keeping up with their mortgages without difficulty compared to 31.5 per cent of women.
Almost one in four women say it is a constant struggle to keep up with repayments while 18 per cent of men are in the same predicament.
While still a low proportion of all borrowers, women (5 per cent) said they were more likely than men (2.5 per cent) to be falling behind on repayments.
Analysts and commercial banks are expecting an increase in the number of people struggling to repay home loans, with lower-income earners most at risk.
This week, Reserve Bank deputy governor Michele Bullock said unemployment would have to rise to around 4.5 per cent to help bring inflation back to the bank’s 2-3 per cent inflation target.
She said low-income earners and women had been among the largest beneficiaries of the fall in the jobless rate.
Executive director of progressive think tank Per Capita, Emma Dawson, said the research showed the problems facing women in the property market even before the recent ramp-up in interest rates.
“What is clear is that women, who are already less likely to own their own home or benefit from investment properties, and more likely to be trapped in unaffordable private rental properties throughout their lives, will be further disadvantaged in our housing market as the gender gift gap gives their brothers a bigger boost to buy their first home,” she said.
(Image by Dion Georgopoulos)