Australia's hot housing market puts renters off having kids
Married couples who are mortgage holders among most likely to have kids
Sydney
AUSTRALIA'S red-hot housing market is discouraging people who rent their homes from having children, while having the opposite effect on those who own their property, showed research by the University of Sydney.
"The increase in housing costs may directly impact fertility, which may have significant fiscal implications over the long term," authors Kadir Atalay, Ang Li and Stephen Whelan said in the study that was published in the Journal of Housing Economics.
Australia, like much of the developed world, is grappling with soaring property prices fuelled by record-low interest rates as central banks try to nurse their economies through the pandemic. The value of the nation's housing market jumped by A$596.4 billion (S$578.8 billion) to almost A$9 trillion in the 3 months ended June, the largest quarterly gain on record.
A A$100,000 increase in housing wealth is associated with an 18 per cent rise in the probability of home-owners having a new child, the research showed. Married couples who are mortgage holders are among the most likely to have kids. For renters though, soaring housing prices tend to have the reverse effect, putting them off having children.
Sydney University said the research was the first time in Australia that family plans had been measured against home prices, adding that the findings matched similar work in the UK, US and Canada. "In an environment in which Australia and other countries face an ageing population, the empirical results indicate an additional challenge for policymakers," the economists said.
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The paper highlights that dwelling costs provide another mechanism for policymakers to influence fertility. The Australian fertility rate has been below the replacement rate since the late 1970s, a period in which the real price of housing has more than tripled.
Australia has historically relied on immigration to drive population growth. BLOOMBERG
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