Regional Boom Lifts Aussie Baby Numbers Amidst Rate Hikes

Australia registered a modest increase in births in 2025, with the national fertility rate reaching 1.497, a 2.6% rise. This uptick reversed a long-term decline, largely attributed to higher birth rates in regional areas of New South Wales and Victoria.

Regional NSW saw an 8% birth increase, with a fertility rate of 1.87, while regional Victoria's rate was 1.91. Several regional councils in both states maintained fertility rates above the replacement level of 2.1.

Conversely, fertility rates fell in most capital cities, with Canberra at 1.29 and Sydney and Melbourne at 1.38. Inner-city councils, particularly in Sydney and Melbourne, recorded some of the nation's lowest and fastest-declining fertility rates.

Economists link the 2025 increase to improved family economic circumstances in late 2023 and 2024, including easing cost-of-living pressures and softening interest rates. However, this positive trend is likely to be short-lived.

With inflation at 4.3% and five interest rate hikes this year, household costs have increased significantly. Experts predict that these rising living expenses will likely lead to a decrease in birth numbers in 2026.

The national fertility rate has remained around 1.5 for three years. Unlike some nations facing steeper declines, there are no clear policy levers or upcoming changes anticipated to significantly boost Australia's fertility rate back towards pre-COVID levels of around 1.7.

Notably, fertility rates continue to fall among younger women, with the 2025 increase driven by women aged 25 to 39. Fertility slumps are a global issue, with some European and Asian nations experiencing more severe declines.