Now for part 2 (thanks to a comment in TRE that lead to this research paper).
"This article extends a standard Beckerian model of fertility behavior to formulate the effect of house price (HP) on fertility. The simple model predicts a negative effect of HP on the number of children for a representative household not only through the income effect but also through the compensated substitution effect. The prediction is confirmed by a cointegration analysis applied to the annual data at the aggregate level covering the period from 1971 to 2005 in Hong Kong. It is found that a 1% increase in HP is significantly related to a 0.45% decrease in total fertility rates (TFRs), which is robust in sensitivity tests with an alternative model specification and alternative measures of TFRs. This implies that high HP inflation can account for about 65% of the fertility decrease in Hong Kong in the past four decades." ("JEL" J13, J11, C32) Copyright (c) 2009 Western Economic Association International".[Link[
You can go through the paper yourself but I would think it is all common sense. If housing cost is high, couples delay marriage and having children because of the heavier financial burden of owning a home. Expensive homes mean that couples buy smaller homes to keep their finances manageable. You have small home, you tend to have fewer children because it is uncomfortable to pack too many people in a small home. Expensive homes means one has to service a larger mortgage stretched and that reduces the financial resources of married couples. In short, higher debt ...smaller homes, higher financial burdens ...all lead to lower fertility in a developed country.
So what has been driving up home prices? The massive influx of people from China and India. What do some of leaders tell us is the solution for our low fertility - import more people to keep the economy growing. This will put Singapore and Singaporeans in a vicious cycle:
Why are the same politicians who are willing to spend $10B a year on defense (and maintain this high spending) also asking us to adopt a solution that will shrink the core of our local born population? At the end of the day, what are we actually defending if we are not defending the local population? Given the environment we are in - neighboring countries highly dependent on global trade hence compelled to comply with international norms of behavior - isn't the biggest threat to the future of Singaporeans this vicious cycle they will to put us in?
In an earlier post discussing solutions for our shrinking population, many of the things that need to be done for housing, healthcare and transport to improve our fertility rate are also things we need to do to improve the quality of life of ordinary Singaporeans. We have the financial resources to do all this - what is needed is the political will to make changes and reallocate our national budget to take us out of this vicious cycle.