Penang recorded Malaysia’s lowest total fertility rate in 2025, raising questions about whether the rising cost of living is making it increasingly difficult for young Malaysians to start and raise families.

According to the Department of Statistics Malaysia (DOSM), Penang’s total fertility rate (TFR) fell from 1.2 children per woman aged 15 to 49 in 2024 to 1.1 in 2025.

Nationally, the fertility rate declined from 1.6 to 1.5 children per woman, while the number of live births dropped by 4.5%, from 414,918 in 2024 to 396,175 in 2025.

These figures raise an important question. Can young Malaysians realistically afford to raise a family in today's economic climate?

The cost of parenthood starts before birth

Having a child involves more than paying for delivery and buying newborn essentials. The financial commitment begins during pregnancy and continues for years after a child is born.

For families using private healthcare, published maternity packages at Malaysian hospitals illustrate the initial cost of childbirth.

Normal-delivery packages at selected private hospitals range from approximately RM2,200 to RM5,500, while caesarean packages at hospitals publishing fixed prices range from RM5,200 to RM12,000.

These are package prices for selected hospitals, not a national average or a guarantee of the final bill. Additional treatment, complications and services excluded from the packages can increase the cost.

These expenses come before accounting for antenatal consultations, scans, supplements, transport to medical appointments and postpartum recovery.

After birth, recurring costs include nappies, feeding supplies, healthcare and childcare. As children grow, parents must also budget for education, transportation and other everyday needs.

For young adults who are still building their savings and establishing their careers, these expenses can compete with other financial priorities, including housing and emergency savings.

The question is not simply whether parents can afford to give birth, but whether they can sustain the financial commitment that follows.

Housing and everyday expenses add to the pressure

Housing is another major financial commitment for young adults preparing to start a family.

According to the National Property Information Centre (NAPIC), Malaysia's average residential property price reached RM490,376 in the second quarter of 2025. The figure covers residential properties nationally, although actual prices vary by location and property type.

Meanwhile, DOSM's Salaries and Wages Survey 2025 reported a median monthly salary and wage of RM2,940 for Malaysian citizens. This means half of Malaysian citizens earning salaries and wages earned less than this amount, while the other half earned more.

The difference between earnings and housing costs illustrates the scale of the financial commitment facing prospective homeowners.

Even before considering a child's expenses, households need to account for housing payments or rent, food, utilities, transport and savings.

The pressure extends beyond housing.

DOSM's Household Expenditure Survey 2024 found that average monthly household consumption expenditure reached RM5,566 nationally, with housing, water, electricity, gas and other fuels accounting for 23.5% of expenditure, or approximately RM1,307 per month. Food and beverages accounted for another RM876 per month on average.

These figures provide a picture of how much households already spend on everyday necessities before considering the additional costs associated with raising a child.

For couples planning to have children, the challenge is therefore not just paying for pregnancy and childbirth. It is fitting the long-term cost of parenthood into a household budget that already has substantial commitments.

Childcare can add another recurring expense, particularly when both parents work. Without affordable and accessible care, some parents may need to adjust their working hours, rely on family members or reconsider their employment arrangements.

These decisions can affect household income, savings and career progression over time.

Beyond encouraging young people to have children

Penang's declining fertility rate raises questions about whether existing family support measures adequately address the financial realities of parenthood.

Encouraging people to have children may have limited impact if prospective parents remain concerned about housing affordability, employment stability, childcare and the cost of raising a family.

Support could extend beyond one-off payments following childbirth to include more affordable childcare, accessible maternal healthcare, family-friendly employment policies and housing measures that help young adults establish independent households.

These measures would not necessarily lead to higher fertility rates. People make decisions about having children for various reasons, including personal preferences, relationships, health and career aspirations.

The latest fertility statistics do not establish how much financial pressure contributes to Penang's decline.

However, the costs associated with housing, everyday necessities and childbirth provide concrete reasons to examine whether economic conditions are making parenthood more difficult for some young Malaysians.

Making parenthood financially sustainable

Malaysia's fertility rate of 1.5 children per woman in 2025 remains below the commonly cited replacement level of 2.1. If low fertility persists, the country could face longer-term demographic challenges, including population ageing and a smaller workforce relative to its population.

Addressing these challenges requires more than focusing on how many children people have. It also means examining whether families can afford to raise children without compromising their financial security.

Penang's fertility rate of 1.1 makes this discussion particularly relevant. While the figures do not establish that rising costs caused the decline, they highlight the importance of understanding the circumstances in which young adults make family decisions.

Ultimately, the question is not simply why young Malaysians are having fewer children, but whether they can afford to raise the families they want.

If Malaysia wants to address its declining fertility rate, making parenthood financially sustainable deserves as much attention as encouraging people to become parents in the first place.