Will Gen Y women flock to Bitcoin, rejecting traditional investment options? Bianca Hartge-Hazelman from Financy reckons the lure is stronger than many people think.
Between the digital currency Bitcoin and ultra low interest rates, there’s a new generation of investors starting to care very little for Australian property, and younger women will be amongst it.
As the Reserve Bank of Australia decided this week to leave the cash rate unchanged at 1.50 per cent, rising debt levels and high property prices are simply turning Generation Y’ers off owning residential property.
This is despite borrowing costs via interest rates remaining at record lows for over a year and a slight pull back in house prices.
National dwelling values held steady in November, with a 0.1 per cent fall in capital city dwelling values offsetting a 0.2 per cent rise in values across the combined regional markets of Australia, according to CoreLogic’s November Hedonic Home Value Index results.
According to CoreLogic head of research Tim Lawless, a significant contributor to the downwards movement over the month came from the Sydney housing market, which recorded a 0.7 per cent fall in dwelling values.
The median dwelling price in Sydney is $904,000. Compare that to the average full-time weekly wage for women of $1,387 and $1,637 for men, and the purchase price is massive.
Instead many Gen Y’s are looking at alternative assets, such as Bitcoin, which despite trading around $US11,000, have a much lower entry price than residential property. Although it has to be said that the risks and volatility factors are much greater.
But a further study published on Bitcoin.com suggests that women are less likely than men to own Bitcoins, largely because the world of tech, from courses and jobs, are still dominated by men. It’s also assumed that men tend to have more interest in tech gadgets, although given that further studies suggest more women use social media, we might argue otherwise.
Research by numerous financial planning organisations also suggests that women are also less likely than men to take investment risks or buy into riskier plays with their money.
AMP Capital’s chief economist Dr Shane Oliver said Bitcoin’s recent price surge increasingly looks to have more to do with speculative investor demand as rapid price gains and stories of millions being made on it with headlines like “Bitcoin mania sweeps into Manhattan” and “Bitcoin leaves sceptics behind” attract more attention to it.
“It has all the elements of a classic bubble but there is no way to reliably value it as it produces no income so it’s impossible to tell how far it could go up before the music stops.
“But what goes up rapidly can come down just as rapidly and the volatility seen over the last week (where bitcoin rose to just below $11,500 only to fall back to near $9000 before rebounding again) provides a reminder that it’s not great at providing a reliable store of value which is a key characteristic of a currency.”
But irrespective of where Bitcoin is likely to go from here, it seems that the longer interest rates stay low and Australian property remains unaffordable to first home buyers, that this may only increase interest among Gen Y to get on board, and younger women at that.
Indeed the Financy Women’s Index shows more women are now choosing to study tech as part of their tertiary education at a faster pace than men.
Perhaps this alone could prove that change is afoot, and investing in Bitcoin-like assets will be part of that story