GOOD news for young couples wondering if they can ever afford children: it might not cost as much as you think.
Sydney has been ranked as Australia's cheapest city to raise children, despite having the highest house prices.
A state-by-state breakdown of the cost of kids in Australia has found the cost of raising a first child in Sydney to the age of 18 is $234,192, well below the national average of $276,445.
Perth was the most expensive place to raise children at $332,442, thanks to the mining boom's inflationary pressure.
Childcare emerges as the biggest cost in Sydney, setting back working parents $68,951 over 18 years, even after government subsidies.
Food is the second biggest budget cost, at $59,719 to feed a child a healthy diet, including some takeaway food but no restaurant meals.
The groundbreaking research by associate professor Paul Henman of the School of Social Work and Human Services at the University of Queensland uses a "budget standards" approach.
Dr Henman's work has been used by the federal government to set appropriate child support payments.
Rather than tracking what parents actually spend on their children, it measures the changing cost of providing a "modest but adequate" upbringing for a child representing "middle Australia".
"There is no fixed or absolute cost of a child," Dr Henman said.
"Costs of children estimates using this approach measure what is needed to be spent on children to meet community standards, rather than what can be afforded."
Sydney parents may be surprised to hear that they face the lowest cost of all capital cities to house their first child, costing only an extra $32,760 in housing costs over 18 years.
While Sydney is home to the most expensive housing in Australia, when researchers looked at the marginal cost of renting a two-bedroom unit versus a one-bedroom unit, the difference was smaller in Sydney than in all other state capital cities.
"Somewhat surprisingly, Sydney is one of the cheapest cities in which to raise a child," he said.
"There is a greater oversupply of units in Sydney, which results in less cost in upgrading dwelling size."
Generally, second and third children cost less. The survey does not include spending on private school fees, private health insurance, the lost income of parents from not working, or costs incurred after age 18, like university or paying for weddings.
Dr Henman said in reality, parents are spending more on their kids because they can.
"The cost of raising a child increases with household income," he said.
"Higher income households have greater living standards, which children share."
Even so, the basic costs add up. In their first 18 years, raising a healthy child in Sydney will still cost $6804 in trips to the dentist and pharmaceutical drugs. Toys, books and a one-week domestic holiday a year will cost $12,640. Personal care items - like shampoo - add up to $6338, while a child adds $6637 to electricity and gas bills.
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