Tasmanians are still having more babies than any other state or territory, figures from the Australian Bureau of Statistics (ABS) show.
Australia's fertility rate declined from 1.96 to 1.90 babies per reproductive woman in 2009, according to ABS data released on Wednesday.
Despite the figure dropping in every state except Queensland, the average for Tasmania was 2.18 babies per woman, while the Australian Capital Territory had the lowest at 1.74.
Women in Tasmania were also most likely start a family earlier, with the peak in births seen among those aged 25-29 years compared to 30-34 years for women in the rest of the country.
Tasmania's relatively low cost of living is a major factor in the high fertility rate, according to University of Waikato demography expert Natalie Jackson.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"Housing affordability ... allows younger people to start their families earlier, and older parents to afford an additional child," said Prof Jackson, who spent 11 years researching in Tasmania.
"Statistics aside, it would seem that Tasmanians are lucky to enjoy a more familial culture.
There are positive and negative effects of women having children at a younger age, Prof Jackson said.
"Early childbearing per se can be associated rather negatively with Tasmania's lower educational levels, lower incomes, and lower female labour force participation," she said.
"(However), when women have their families at younger ages they are free to re-enter the workforce earlier and have the option of a longer paid worklife."
