Is real estate investing gendered?

Published July 7, 2022 11:05 AMUpdated July 7, 2022 12:08 PM.

Women’s financial equality with their male counterparts is a long struggle. According to INSEE, the gap in private sector wages and full-time equivalent wages still stands at 16.8% between men and women.

Not surprisingly, capital generally reproduces this discrimination, since women’s financial well-being is 15% lower. Worse, rental property highlights the gender gap, with only 35% of landlords being women.

But the pay gap doesn’t explain everything…

Women prefer precautionary savings

First, it is saving behavior. According to a recent study by Opinionway for Atland and FundImmo published in 2021, 80% of women describe themselves as “cautious investors”. They prefer investments that offer lower returns and less risk.

Why ? Two factors: a weak financial culture and the fear of making the wrong choice. This pushes women to lose interest in certain products. The lack of female role models in finance also contributes to their distrust of certain investments. Two-thirds of women would like to know more about these issues (source: Opinionway).

Curious Investors

However, let’s not generalize too much: in other assets with extreme volatility, women are most interested. According to a 2022 CapGemini study, 47% of “crypto-curious” people are women. Also in France, women are the most at risk, as according to this study, almost half (45%) of crypto investors are women.

In fact, the main reason for their so-called “prudent” savings behavior has to do with their lower incomes. (We’ll come back to this later.) Their lower ability would encourage them to moderate, making reserve savings a priority. Consequence: this is a more affordable, but less effective way to save money.

In the world of the earth, it is customary to caricature roles: “Women choose correctly, men invest. » Reality is far from this. Buying a primary home as a couple is often a bilateral, co-financed, and long-term project. Moreover, according to another study by OpinionWay for Vousfinancer in 2017, young couples aged 25-34 years old 56% prefer buying a couple over marriage.

Earn less, invest less, earn less

However, the rental property sector is evidence of gender inequality. According to research by rental management website Flatlooker published in March 2022, women are almost excluded from this type of investment. And those few women who do this … earn less! Their rental income is 16% lower than that of men.

Evil is, of course, deeper. If we look at the theory of behavioral finance, we understand that certain cognitive biases contribute to the widening of the gap between men and women. The latter reproduce the same investment strategy as for financial products, showing greater risk aversion. They tend to position themselves at facilities located in less dynamic areas.

Uneven transmission

First of all, it is urgent to take stock of the appropriation of capital by people. More than ever, a more equitable distribution of financial capital, as well as real estate, has become relevant. An essay by Celine Bessières and Sybille Gollack titled “View of the capital” (La Découverte, 2020) addressed the issue of gender in heritage and the reproduction of inequality.

Sociologists shed light on customs within families that systematically favor women in the transmission of heritage. Salic law is unconsciously applied in the division of capital, favoring male primogeniture. It is time to deconstruct this outdated system and finally ensure real equity in the distribution and development of capital regardless of gender.

The answer to the original question is: no, investment should not be determined by gender, but behavior is the result of structural gender inequality.