Women lead the charge in Australia’s $5 Trillion Wealth Transfer

Women will be the overwhelming winners from the intergenerational wealth transfer in Australia

A recent report by JBWere reveals that women will be the primary beneficiaries of the intergenerational wealth transfer in Australia, inheriting 65% of the nearly $5 trillion (approximately $3.2 trillion) set to pass from Baby Boomers and their parents to the next generation by 2034.

JBWere’s chief executive, Maria Lykouras, observed, “Over the next decade, women will not only generate their own wealth but will also benefit significantly from the imminent intergenerational wealth transfer.”

Why are women expected to play a significant role in this wealth transfer?

Traditionally, men have been viewed as the primary earners and decision-makers in family finances and wealth management. However, over the years, there has been a significant shift toward greater gender equality in career opportunities, and financial independence for women. This change is driven by factors such as education, women’s longer life expectancy and changing divorce outcomes.

Moreover, the ‘older daughter effect’ has become increasingly influential, with financial responsibilities often being passed to the eldest daughter rather than the eldest son.

The rise of female financial power

In recent years, there has been a significant shift in the gender roles within households all over the world. According to a report by the Australian Bureau of Statistics (ABS), women now make up almost half of all employees in Australia, an increase from 30% in 1966. Furthermore, more women than men are graduating from universities, with women making up 59% of all university graduates in 2019.

This changing landscape has led to a rise in female financial power, with women taking on more significant roles in managing family finances and making investment decisions.

Women have also become millionaires at twice the rate of men over the past decade.  According to the JBWere, the number of women becoming millionaires increased by 5.7%, outpacing the 3.6% growth among men. And with $3.2 trillion expected to be managed by women over the next decade, we’re witnessing a significant shift in wealth ownership and management in this country.

Women & property investment - What do the CoreLogic findings show?

Homeownership in Australia is undergoing a significant change, with more women buying and owning properties than ever before. According to the 2024 CoreLogic Women and Property report, women now outpace men when it comes to buying property, and the gap is only expected to widen in the coming years.

[Read blog https://ironfish.com.au/blog-news/how-women-are-forging-their-own-path-in-property-investment/ ]

According to the survey, 68.2% of women own at least one residential property, compared to 67.4% of men. However, the report also highlights significant generational differences in property ownership. For example, only 27.3% of women under 30 own a residential property compared to 51.6% of men, indicating financial barriers that younger women face. Despite these challenges, younger women place a high importance on property ownership, with 51.0% rating it as highly important compared to 43.2% of their male counterparts.

Women's attitudes to property investment

Ownership of property holds significant importance for women, as evidenced by the CoreLogic Women and Property report. 75.4% of women consider home ownership highly important, compared to 66.0% of men. This strong emphasis on property ownership among women indicates a growing awareness of the long-term financial benefits and stability that come with owning a home.

Economic implications for Australia

Women often face greater financial challenges and barriers to entering the property market. This can lead to missed economic opportunities, ultimately hindering long-term wealth creation. However, the impending wealth transfer presents Australian women an opportunity to better control their future financial security, particularly through property investment.

Real estate stands out as one of the premier asset classes for long-term wealth creation. Although housing values experience cycles of growth and decline, the long-term trend remains unmistakably upward. Over the past 30 years, house prices in Australia have increased 382%, translating to an average annual compounded growth rate of 5.4% since July 1992. This steady growth, coupled with a growing population and limited housing supply, means more women can now use property investing as a means to increase their wealth and secure their financial future.

Challenges faced in property ownership

The challenges of property ownership can be overcome by smart investment strategies, which can also help alleviate financial disparities between men and women. The rising cost of housing in Australia has made it difficult for many people, to enter the property market. This is due to a combination of factors such as increasing property prices and stagnant wages.

Summary

Thanks to the upcoming $5 trillion intergenerational wealth transfer, women are poised to take advantage of the opportunities available in the property market. With smart investment strategies, women can increase their wealth through property investment.

With a focus on education and empowerment, Ironfish can help women take control of their financial futures through property investment and support all of our clients achieve financial success.