The Implicit Male Norm in Australian Housing Finance

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Australian literature on women and housing has tended to concentrate on sole parent women or single "never married" women from the conventional view of discrimination through lower income, lower human capital investment, or by combining single person households, male and female, together [Cass 1991; Bourassa 1993; ABS 1993]. In this paper, we focus on single women as a group particularly disadvantaged in a culture where the overwhelming majority of Australians aspire to home ownership [Kliger 1992]. Home ownership is also the single most important source of wealth accumulation for individuals in Australia. Therefore, to treat women's housing as a welfare issue may deny women access to this form of wealth accumulation.

When this research was begun, we believed that few women achieved home ownership. We were concerned with the social and economic ramifications that stem from non-ownership in a culture overwhelmingly structured around home ownership financing. Earlier studies show that those who do not achieve home ownership have only two options open to them--rent privately or rent from the government [Kliger 1992]. These studies also reveal that women who are left in the private rental market at retirement are often paying 50 percent of their income on housing. Those lucky enough to access the 5 percent low-cost government housing will still be paying 25 percent of their income on housing. This contrasts sharply with those who owned their homes and were paying only 5 percent of their income at retirement [National Housing Strategy, Issues Paper 2, 1991].

Recent changes to capital adequacy requirements for Australian banks now favor all loans to individuals being put in a "housing basket." Home loans have a risk weighting of 50 percent. From mid-1993, all loans secured by housing, irrespective of their use, also attract the 50 percent risk weighting. This has lowered the cost of non-housing personal loans and has also resulted in a push toward consolidated loans. Those without homes to offer as security are only able to borrow at higher rates of interest.

Single Women and Home Ownership

A particular financial disadvantage for single women is government mandated superannuation. The aging of the Australian population means the government is less able and willing to fund age pensions [Jureidini 1988]. This debate has been fuelled by government enforcement of universal superannuation, which has resulted in national wage increases not being paid directly to workers but being placed into superannuation funds on their behalf.

This has serious ramifications for single women in Australia as their incomes are on average 76 percent of male incomes [Australian Bureau of Statistics 1993]. Consequently, the level of superannuation that will be paid to single women will be lower than for men but high enough to exclude them from government assistance. These women will not be economically better off as a result. Their disposable incomes are lowered now for future retirement benefits. However, it reduces their present capacity to purchase a home.

As a consequence of lower superannuation benefits for women and little or no government pension, the value of homes as a store of wealth will become important to single women in their retirement years. That is, home ownership will provide single women with the opportunity in retirement to obtain a "reverse mortgage" and ensure that their mature years are not spent in poverty. This is discussed further below.

Studies have shown that more than 90 percent of Australians aspire to home ownership [Cass 1991]. In 1988 and 1991, the Australian Census of Housing and Population revealed that more than 70 percent of households had achieved this goal. Further, 80 percent of married couples had been able to purchase their own home. This compares with 68 percent of single women and 51 percent of single men in the 1991 census. On the face of it, these statistics look quite favorable for single women. …