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If this was 1966, Auckland couple Tom Gray and Nicola Reid would most likely be married and live in their own home.It would have cost them about three or four times Tom's annual income, Nicola would have had her first child, and according to the fertility rate of the time, they'd go on to have about three kids. The 26-year-old would almost certainly be a stay-at-home mum — at least while the children were young, and the couple's mortgage would be paid off well before Tom's retirement.
Fast-forward 50 years where Gray, 30, and Reid, 26, have little in common with their earlier hypothetical selves. They have bought a home in Auckland — a do-up on the North Shore they purchased two-and-a-half years ago — but they need both incomes to pay the mortgage – and as for having children, it'll be some time before they're ready, and can afford to start a family.
Since 1980, New Zealand's birth-rate has averaged 2.02 births per woman. That's a fraction below replacement level — and it's projected to decline to 1.99 long-term. And many women are choosing to have children later in life.
Census figures show that in 2013, that for the first time, the number of children born to women aged 35-39 overtook those born to mums aged 20-24. Now, with the average Auckland house price thought to be 10 times the median household income – it's likely an increasing number of couples will have to choose between buying a house, or starting a family.
After scrimping and saving everything they could, Gray and Reid managed to squeeze onto the property ladder after a year-long search. They paid just over $500,000 — a relatively low price by today's standards. But Gray says there's "absolutely no way" they could have had a baby then, and even now it's still a fair way off.
"We want to be able to be in a relatively financial stable position to be able to go down to one income for at least 12 months so Nicola can stay at home with the child. In a perfect world, she'd stay off for longer but realistically, she's probably going to have to go back after 12e months."
The couple use revolving credit to shave as much interest as possible off their mortgage and at the same time, they're saving for their wedding. But Gray says they're still in a much more fortunate position than others they know – who no longer have the luxury of both planning a family and saving for a house. "It's one or the other."
Auckland mortgage broker Bruce Patten needs no convincing. Up to 20 percent of his business is first-home buyers, and he says nearly all are signing up to mortgages of at least $500,000. The lowest first-home loan he's brokered for August alone is $508,000, while the highest has been $900,000. Now, the latest QV ratings have showed the average house price in the region has risen to $1 million.
He says it's "amazingly common" how often he hears clients say they'll now have to wait to have children — and not just to reduce debt. "It's (also) about putting it off because they need to save up so they have enough money to pay the shortfall on their mortgage if one takes a year off." While most have had some sort of help such as a loan, gift or guarantee from parents – they've still had to make sacrifices for the rest of the deposit.
Patten says it's quite prevalent now to see couples each living at their own parents' houses — just to be able to save the money. Earlier this year Barfoot & Thompson released a survey of more than 500 young Aucklanders who are yet to own a property. It found 91 per cent want to own their own home one day and half of those are actively making plans to do so. Of those aged over 25, at least 20 per cent are living at home with family and 18 per cent are delaying having children to save money.
Patten has worked in the finance industry for 25 years but says the issue of delaying-children has really only been noticeable in the past couple of years. "If we look at the last property boom in 2007, it wasn't really a consideration at that stage. I think it's because the multiplier of borrowing for Auckland in particular has become so great, that it's being forced on people now, whereas previously it may not have been so hard."
Natalie Sobotka, 32, knows about the challenges of juggling parenthood and finances. She and her 35-year-old husband Damian bought a house in Waitakere three years ago, and have since had two-year-old Callum. Both are working full-time and are "catching up" after Natalie took a year off on maternity leave. Their toddler is now in daycare and, like many working parents, they find their lives incredibly busy.
"Callum's gotten sick quite a lot. In the first year, I think I had about 25 days off work. That's hard, when they get really sick and you feel really guilty about it but you just have to get on with it." She considers themselves very fortunate to have bought a house when they did and believes they couldn't have purchased in the current market with a child. But as for having another. it's not an option yet. "I'd like to think maybe once Callum starts school perhaps and we've paid down a bit of our mortgage and maybe I could afford to reduce my hours, or do some work from home, that it could be a possibility. I'm not ruling it out completely but definitely not at the moment."
Natalie says she's watched friends have more than one child "when they really can't afford it" and they've hit struggle-street big time. "While a lot of people say it shouldn't be about money, I think to some extent it does have to be a little bit about money…because the kids are the ones who end up suffering."
So will the housing market actually impact on fertility trends? It seems to be the case in Hong Kong. Research published in the academic journal Economic Inquiry in 2010, found high house prices account for about 65 per cent of the fertility decrease in Hong Kong in the past four decades. Statistics New Zealand demographer Dr Robert Didham thinks "it probably will" have an impact in New Zealand, although he's not aware of research being done on the specific link.
"I can see how both the perception and the realities of an Auckland housing crisis could influence people's decisions not to have children, or not to have more children. The cost of housing, child rearing, access to and cost of facilities for education all contribute." But he says one huge advantage New Zealand has over the likes of Hong Kong is our parental leave provisions. Women in Hong Kong are entitled to 10 weeks paid leave, but unlike New Zealand, they don't have a year-long extended leave option. And here, there is Working for Families tax relief for those on lower incomes.
There are of course, other reasons women are delaying having children, or having none at all. As the fairer sex becomes better educated — many are opting to establish a career before starting a family. And the more qualified they are the fewer children they appear to have. Statistics NZ figures show that in 2013, 44 percent of Auckland women aged 30-49 who had a post-grad qualification, and worked fulltime didn't have kids. Yet just 20 per cent of those in the same-age group who worked fulltime but had no qualifications were childless. And the number of births to mothers aged 40-44 has been steadily rising — from 1389 in 1999, to 2381 last year.
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