Date
23 May 2017
A 1 percent increase in housing prices causes a 0.45 percent decline in fertility rates, according to a study by the Chinese University of Hong Kong. Photo: HKEJ
A 1 percent increase in housing prices causes a 0.45 percent decline in fertility rates, according to a study by the Chinese University of Hong Kong. Photo: HKEJ

How rising home prices lead to falling fertility rates

Newly elected lawmaker Yau Wai-ching lashed out at the government in a recent forum that it’s too hard for young couples to find a place to have sex.

What she has pointed out is actually a serious problem — expensive local housing is threatening to drive down the city’s already low birth rate.

Research shows that the high cost of housing would delay marriage and reduce the fertility rate as well.

That would affect various social issues such as aging.

A US$10,000 increase in home prices in metropolitan areas would lead to a 2.4 percent fall in fertility rates among non-homeowners, according to a study by the US National Bureau of Economic Research.

That said, the problem is not having a big impact on the US because Americans have a choice to live in much cheaper suburbs and drive to work every day.

Nearly 70 percent of US households own their homes.

The study also shows homeowners would consider having more children if local housing prices were on the rise.

That partially offsets the negative effect on the birth rate of non-homeowners.

House prices have a limited impact on the overall fertility rate in the US.

Hong Kong, however, is different.

Many young people live with their parents in some of the most cramped apartment blocks in the world.

And they are struggling with exorbitant housing prices and rental costs.

Finding a place for an intimate time with partners is costly, let alone having a family.

A 1 percent increase in housing prices causes a 0.45 percent decline in the fertility rate, according to a study by the Chinese University of Hong Kong.

Residential properties are so expensive even a tiny flat in the suburbs such such Tuen Mun and Yuen Long can top HK$10,000 (US$1,290) per square foot.

The marriage rate, or the number of marriages per 1,000 people fell to 7.1 last year, far below the 8.2 percent in 2011, according to data from The Census and Statistics Department.

On average, a woman has her first child at 31.4 compared with 29.4 a decade ago.

Hong Kong’s total fertility rate is only 1.19 per woman, among the lowest in the world and even lower than Japan’s 1.41.

In a 2013 survey, more than 40 percent of respondents said they chose not to have a child due to financial problems or housing problems.

Hong Kong’s housing prices have skyrocketed since 2013, suggesting more couples may be held back from having children.

This article appeared in the Hong Kong Economic Journal on Oct. 7

Translation by Julie Zhu

[Chinese version 中文版]

– Contact us at [email protected]

RA

Hong Kong Economic Journal columnist

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