For the first time in Australia, people's plans to have children and the outcomes of this have been measured against property prices. In a bullish market, property owners intend to and do have more children. For non-homeowners with children, an increase in house prices is associated with lower intentions to have children.
The research was led by University of Sydney economists and published in the Journal of Housing Economics.
Nationally, property prices have risen by more than 20 percent over the past two years. The study's results, based on data from 2001 to 2018, are now likely even stronger, lead author Associate Professor Stephen Whelan said.
"While there has been significant debate about appropriate policy settings in light of rapidly increasing house prices and its impact on home ownership, there has been little discussion of the implication of housing market developments on people's decisions to have children," he said.
...rapidly increasing house prices are associated with changes in both intentions to have children and the outcomes of this...
"This research indicates that rapidly increasing house prices are associated with changes in both outcomes and intentions about whether to have children."
The researchers further found that a $100,000 increase in housing wealth is associated with an 18 percent increase in the probability of having a child. Married mortgage holders are the most likely to have children.
Associate Professor Whelan said he and his colleagues have highlighted an important and perhaps unsurprising trend. "Housing constitutes a major cost of raising a child so, as the cost of housing increases, having children in Australia has become more expensive," he said.
"Renters, who are generally less financially secure than home owners, may choose to delay having children in the face of rapidly rising house prices."
The Australian fertility rate has been below the replacement rate since the late 1970s, while the real price of housing has more than tripled during the same period.
About the study
The researchers crunched the numbers using responses from partnered females aged 25 to 45 to the annual, national Household, Income and Labour Dynamics in Australia (HILDA) surveys from 2001 and 2018. Specifically, they relied on the HILDA survey question: 'How likely are you to have a child/more children in the future?' on a scale of 0 (very unlikely) to 10 (very likely) as well as one that asked participants to report their housing prices. To ensure the accuracy of this data point, they supplemented it with LGA-based median property price data. After controlling for fertility timing among other variables, they found a direct correlation between property prices and childbearing intentions and outcomes.
Their findings match those of similar studies in the UK, the US and Canada.
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