That new car in the garage isn’t the most expensive item in a typical Australian home. It might not be the home, itself, either, despite the soaring property market.

Quite likely, it’s the kids. A new study, conducted jointly by the National Centre for Social and Economic Modelling and the AMP, reveals that it now costs a total of more than half a million dollars to raise just two children to the age of 21.

NATSEM’s economists admit that raising a family is one of the most challenging and rewarding things people can do.

“It can bring a lot of joy,” they say in their report.

“But it does come at a high price,” they add.

The 18th AMP.NATSEM Income and Wealth Report draws from a broad range of statistical information to provide an insight into the cost of raising children from birth until leaving home.

It does so for three typical families in low, middle and high income brackets.

This report updates the 3rd AMP.NATSEM Income and Wealth Report released in 2002.

Their conclusion?

“A typical Australian family spends $537,000 on raising two children from birth to 21 years.”

A shock, certainly. However the economists add a word or two of comfort.

“On paper this is a big figure” they say.

“But any perception that it’s getting more expensive to raise children, is off the mark.

“According to this report, the typical family spends 23 per cent of its combined income on the cost of raising children.”

The economists say this is the same percentage as a broadly comparable family in 2002.