Changing Family Demographics in Australia: What Local Governments and Businesses Need to Know

Explore how Australia’s changing birth rates and family structures impact local economies, housing, and service delivery—and what governments and businesses can do to adapt.

Having a child is one of the most life-changing decisions a woman can make. In Australia, nearly 300,000 babies are born each year, many to first-time mothers—most now in their early 30s. In contrast, the average age of first-time mothers in 1970 was just 22.

The number of babies born each year means there are around 1.6 million Australian households with a child under five years of age.  This translates to around one in five families (22%) that have a child under five years of age in their household.

With mothers having an average Australian birth rate of 1.8 over the past ten years, most families have two or more children (61%).  As the Australian birth rate declines, family demographics of single-child families (39%) are likely to become more common.

Beyond the joy that a baby brings a family, birth rates are critically important to the social and economic health of Australia and critically impact local government planning.  In Australia, each child costs an average of $544,000 from birth to 18 years (adjusted to 2024 figures) and being a major contributor to economic growth.

 

What are the significant trends in childbirth?

As the French social philosopher Auguste Comte said, “Demography is destiny”.  Changes are slow, but they have significant and lasting impacts on the culture, capacity, and economic sustainability of a community that can last decades if not changed.

Since the 1960s, there are two major trends:

• The average age of first-time mothers is getting older.
• Women are having fewer children.

Both trends are interrelated and have shown no signs of slowing over the past twenty-five years. They are interrelated because older mothers have less time to have more children, and both trends share common factors.

The infographic below highlights the key trends in Australia’s family demographic trends for birth and the reasons.

 

What are the factors driving these two trends?

Research into understanding what is driving declining birth rates and women having their first child later in life are driven by the below ten influences.  These influences are not new but changes in them have increased their effect, especially since the 1980s. Some of these factors have become stronger in recent years, while others remain as a constant influence.

• Improved birth control.  Contraception has become easier to access, more affordable and more effective since mid-last century.  Improvements continue to be made to reduce unplanned pregnancies.
• Spending more time in education and training.  Increased time in education has meant that women and men are delaying finding a long-term partner and having children until after their education is completed.  Since the 1970s, the completion of education has shifted from year 10 (16 years) to after university or vocational training (21 years).
• Increased work and career demands.  As more women wanted to develop skills and advance in their careers, they delayed having children until they felt more established.
• Leaving the parental home later.  The longer time spent in education meant both women and men delayed leaving home.  Remaining at home also meant they were taking longer to move in with a partner.
• Taking longer to find a long-term partner.  The combined effects of education and career meant that both women and men were forming long-term relationships later in life.
• Less social pressure to have children.  As birth rates declined and children had parents who themselves had spent longer in education and career development, there was less pressure on women to ‘settle down and have children’.  Increased affluence also meant parents were less likely to see their children as having to support them in older age, and as a result, they had less need for children to assist with that support.
• Less stable workforce.  With decreased work security as careers became less confident and employment practices favoured contracts, temporary roles, and outsourcing, women are choosing to delay having children until they have more certainty or are more able to use their skills to find new employment.
• Less able to afford secure housing.  With declining housing affordability for families, women who feel less secure about their ability to house delay having children until they feel they know where they will be living and what support is around them during pregnancy and early childhood years.
• Increased longer-term debt. Increased costs of living, including debt from higher housing costs and education, reduced willingness to have children until debt is more manageable, and they are able to absorb the high costs and debt that will come with having children.
• Increased costs of having children.  The higher costs of having children make incremental costs for larger families unaffordable, especially in the context of higher debt, higher costs of living and housing, and reduced work stability.

 

These ten factors fit into four broad groups:

• Fewer unplanned pregnancies,
• higher family costs (direct and trade-off costs),
• less long-term economic certainty, and
• there is less social pressure to start a family in their twenties.

Magnifying the effect of starting families later in life are increased health risks to mothers and children as a woman ages, and lower fertility with age.  Getting pregnant gets more complicated, costlier and more dangerous.

 

Implications of Declining Birth and Older Mothers

The implications of older mothers and smaller families are large and far-reaching for business and government policy, as well as local government planning.

The economic impact of declining fertility with smaller family size in the short term, shrinks markets for goods and services designed for younger children and families.  Declines in market size increase the cost-pressure on businesses and organisations to supply the market, further increasing the costs of having a family.  These same businesses and organisations are less able to support employment and investment in these markets, which further reduces the number of future families in the area.

 

What does the future hold?

Declining population is a self-reinforcing cycle that no OECD country has managed to reverse.

To break the cycle, the current focus in Australia on maintaining a working age population, skills and economic growth is on immigration.  Around 30% of Australians were born overseas, with Australia second to Luxembourg among OECD countries for overseas-born citizens.  While immigration does deliver benefits, it also comes with costs and does not solve the underlying issues that make regions dependent on immigration.   However, migrants have a lower fertility rate than women born in Australia, as these women face the same factors as other Australian women, but magnified by their recent arrival and need to establish themselves.

While declining birth rates and older motherhood present challenges, they also open doors for innovation in service delivery, targeted business offerings, and policy reform. Local governments and businesses must adapt to these demographic shifts to ensure sustainable growth and community well-being.