Did real estate eat the kids?

Are babies related to houses? Is there a connection between mortgages and oldish moms? Is real estate turning into population control?

The latest numbers, published today by StatsCan, paint the picture of an aging country with an “ultra-low” fertility rate, not enough babies to match dead people, an exodus of non-permanent residents and a growth rate which has collapsed in the past year, now the lowest since the end of WW2. Maybe it’s the lowest ever – we only started to track this stuff in 1946.

We’re now down to a birth rate of 1.25 children per woman. A record. By way of comparison, the US rate is 1.6 kiddos, which is being called a demographic crisis – and blamed in large part on the cost of a house (which is a helluva lot lower than here).

We now join Switzerland, Italy, Japan and South Korea as countries where people would rather not procreate. The age of new Canadian moms, meanwhile, has surged to 32. (It was 26 in 1976.)

Canada’s baby drought as birth rate plunges

Source: Statistics Canada

As for the right-wing moaning that immigration is swamping Canada and bloating our population, the data says otherwise. The growth rate in the nation has crashed 83% in a year. Non-permanent residents numbered three million a year ago. Now there are just 125,000. Over a hundred thousand students alone departed.

Our population is 41,651,653, increasing currently at the slowest pace ever (save for 2020 when Covid locked the place up). That myth about the Libs and ‘open borders’ is just that. Myth. If anything, the combination of a torpedoed fertility rate, immigration halt and that exodus of non-citizens suggests the country could contain fewer people in the near future. That translates into less economic growth, which usually means lower productivity, fewer government services or higher taxes. It certainly has not been the story of Canada from its conception until now.

By the way, the province with the lowest birth rate? It’s BC, at just 1.02 – below that of Japan. So is it any coincidence the average detached house in Vancouver is the highest in Canada, at $1,950,300?

Nah. In fact, a growing body of evidence suggests high house prices are leading directly to population decline, or at least to citizens believing they can no longer afford a rugrat or two. An academic paper in the States came to a stark conclusion. There is a direct correlation between property values and child-bearing.

As house prices go up, the fertility rate tanks

Source: “House Prices and Birth Rates: The Impact of the Real Estate Market on the Decision to Have a Baby”

The authors, an economist with the Fed and a researcher from Notre Dame, looked at fertility rates in major US cities for women aged 20 to 44 over a 16-year period. What they found…

Our results suggest that indeed, short-term increases in house prices lead to a decline in births among non-owners and a net increase among owners. The estimates imply that a $10,000 increase leads to a 5 percent increase in fertility rates among owners and a 2.4 percent decrease among nonowners. At the mean U.S. home ownership rate, these estimates imply that the net effect of a $10,000 increase in house prices is a 0.8 percent increase in current period fertility rates.

In other words, for every ten grand increase in the price of a house, the fertility rate drops almost 1%. And when prices go down, the babies emerge.

Birth rates decline, they argue, because family formation is based on economics, personal finances and cash flow. Kids cost a fortune, and most people think they need a house if they’re going to have children. When houses get expensive, fertility falls. In fact the paper concludes that real estate values are even more important than unemployment rates in driving birth rates.

The decision to spawn, or not, may be based on personal preferences, cultural factors, financial circumstances, the cost of shelter or fear of birthing into a world with a janky future. But the numbers show, starkly, our collective thinking has changed.

Combined with the anti-immigrant sentiment sweeping through tranches of Canadian society, we have come to this. A crossroads.

About the picture: “Dear Garth, each day I read your blog with my good boy Ozymandias (Ozzy),” writes John. “I use your blog to teach Ozzy about the economy including topics such as ‘Shrinkflation’, and demonstrate the concept by cutting his treats in half and presenting it as two.  He now needs to shake a paw twice as much in order to receive a morsel half as big, a classic case of increased effort for diminished returns. Ozzy, clearly skeptical of late-stage capitalism, consoles himself with the one economic constant:  belly rubs, still unlimited and inflation-proof. Here is a picture of him perched on his throne at the dog park in Vancouver.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/09/24/did-real-estate-eat-the-kids/