1. The gender pay gap is still an issue for property
The latest CoreLogic Women and Property Report showed that 22.5% of properties are owned exclusively by males (one or more), with 22% owned by females – the remaining 55.5% is mixed gender ownership.
The top TAs for female home ownership were Whanganui (26.5%), Kawerau (26.4%), South Waikato (25.4%) and Invercargill (25.3%).
Aside from Auckland, which has a relatively high rate of home ownership among women (25.1%), high female ownership areas are typically more rural or provincial, and affordable.
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Interestingly, we see the reverse in Australia, where women tend to have a higher portion of home ownership in more expensive, blue chip markets around the major metros, like Sydney. That could be due to the higher presence of apartment/townhouse units in the main cities.
In both Australia and New Zealand, investment property seems to account for a big portion of the discrepancy between men and women. Empowering women through greater financial literacy and education about property investment may help to erode this disparity in ownership over time.
The overall 0.5 percentage point gap between female and male homeownership in New Zealand is also probably due in large part to the gender wage gap with women on average earning less than men. Closing that gap would no doubt help raise female property ownership rates, with the associated lifetime benefits for wealth and retirement security.
2. Rental growth to slow back again?
The Stats NZ measure of rents (covering new bonds lodged) accelerated in January, from an annual growth rate of 0.8% in December to 2.8%. I’m conscious of the potential for the Auckland floods and Cyclone Gabrielle to distort the data in the next few months, e.g. because bonds weren’t lodged, or property damage affected actual rents. But it still wouldn’t be a surprise if February’s figures (released today) were to show a slowdown from 2.8%.
3. Net migration on the up
On Tuesday, Stats NZ will release the net migration figures for January, which seem likely to have risen again. It’s certainly been a sharp turnaround for net migration in recent months, as a pick-up in new migrants to the country has outweighed the continued departures by NZ citizens. This rising population is now adding to property demand, whether that’s to buy or rent. Now to be fair, it may not trump high mortgage rates or restricted credit availability in the near term. But rising net migration does add to the case for thinking that the market might bottom out later in 2023.
CoreLogic chief economist Kelvin Davidson: "The overall gap between female and male homeownership in New Zealand is probably due in large part to the gender wage gap." Photo / Peter Meecham
4. The last hurrah for GDP getting closer?
Stats NZ will then publish the official Q4 GDP stats on Thursday, which will no doubt generate a lot of coverage. The Reserve Bank anticipates a decent 0.7% quarterly rise, before a slowdown in Q1 (0.2%) and then a drop in GDP in each of the final three quarters of this year – for a total recession of around 1%. Definitely an important stat to keep an eye on, but I’d also point out that the potential associated rise in the unemployment rate is more about a larger labour force (and reduced new job creation rates) rather than mass job losses. This could insulate existing mortgage borrowers to some degree, albeit make it tricky for new entrants to secure a job and a mortgage.
5. Flood risk takes centre stage for buyers
I was out and about last week and had some interesting discussions with estate agents. There’s certainly no doubt that activity is low and most agents I spoke to agreed that there are further challenges ahead, especially as more existing borrowers roll off lower mortgage rates and onto the new higher levels. Of course, they also suggested that the ‘right properties’ are still selling fairly quickly and at good prices.
The agents also reported that new investors are thin on the ground (which squares with the CoreLogic Buyer Classification data), and also that questions from buyers around flood risk have soared in recent weeks – no surprise there, but still quite striking to hear the feedback, especially some buyers walking away from deals due to the flood risk of the property.
- Kelvin Davidson is chief economist at property insights firm CoreLogic
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