Soaring housing prices pull down birth rate: study

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By Yoon Ja-young

As the nation's total population decreased for the first time last year, with the birthrate falling to the world's lowest, a study showed that soaring housing prices are one of the main reasons.

According to a study by Kang Dong-ik and Song Kyung-ho, both researchers at the Korea Institute of Public Finance, a 100 percent hike in housing prices slashes the number of kids each household has by 0.1 to 0.3 for the next 8 years.

Korea's fertility rate, or the number of babies born per woman, fell to 0.81 last year, which is the lowest among the Organization for Economic Cooperation and Development (OECD) member countries.

The research was done by surveying workers at state-run enterprises, which are known to offer stable jobs.

For those who don't own houses, the number of children they give birth to for the next eight years decreased by between 0.15 and 0.45.

That means the higher the price of housing, the less likely couples are to have a child. The study also shows that the ownership of a house has an even greater impact on childbirth.

Housing prices also affected marriage. The study showed that a 100-percent increase in housing prices between 2013 and 2019 pulled down the likelihood of people getting married by between 4 and 5.7 percent.

The research comes as Statistics Korea released the 2021 census Thursday, which showed that the country's total population dropped 0.2 percent from the previous year to 51.74 million. It was the first year-on-year decrease since 1949 when the statistics agency started compiling such data.

“Soaring housing prices have a considerable level of negative impact on marriages and childbirths. It means it is important to stably control the housing market,” the researchers noted.