On Tuesday, the Australian Bureau of Statistics announced there had been fewer first home buyers than it previously reported. As an example, it revised down first home buyers'Â share of the July market from 14.1 per cent to 13.2 per cent.
But the National Australia Bank economics team doesn't believe it.
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The first home buyer mystery
The Australian Bureau of Statistics and National Australia Bank economics team are at odds over the number of first home buyers.
NAB's June quarter survey of property professionals reported nearly a third of new housing was bought by first home buyers and more than a quarter of established housing purchases were by people who hadn't previously owned a property. That's a rather different story to the usual "First home buyers priced out of the market" headline that's been running throughout this housing boom.
The ABS has copped stick for some years about the ropiness of its first home buyers estimate, which used to be based on the number of first home owner grants. The Reserve Bank dropped the FHB category from the housing finance graph in its chart pack in 2014. It hasn't been reinstated.
There are a couple of simple reasons for much, but by no means all, of the difference between the NAB and ABS figures.
First, the ABS only counts first home buyers who are owner occupiers. The NAB survey includes first home buyers who are joining the landlord class – people who rent out their first property while continuing to live with their parents, or perhaps rent where they want to live but buy where they can afford. While most of the tax system's subsidy of negative gearing goes heavily towards the relatively well-off boomers, some Gen Ys are getting in for their chop.
Quite a lot of them, according to the NAB survey, which counted first home buyer investors purchasing 11.1 per cent of new properties and 9.7 per cent of established housing in the June quarter.
That still leaves a big gap between the ABS and NAB first home buyer owner-occupier measures. ABS reckons 13 or 14 per cent. NAB says 21.7 per cent of new and 17.5 per cent of established housing purchases in the June quarter.
![The ABS and NAB have different ideas about how many first home buyers there actually are.](/web/20161010030139im_/http://www.theage.com.au/content/dam/images/g/r/k/2/f/2/image.related.articleLeadwide.620x349.grwzfb.png/1475812813743.jpg)
The ABS says its new, improved first home buyer count comes from Australian Prudential Regulation Authority, which has dropped the weights on lenders to report the status of housing borrowers more accurately. However, that still only captures first home buyers who get an official loan in their own name, as opposed to those withdrawing from the Bank of Mum and Dad, or obtaining a loan under their parents' name, or through an inheritance, successful drug dealing, becoming rock stars, overnight Hollywood sensations and such.
But there just aren't that many successful rock stars and actors. Even allowing for the above possibilities, the gap between the official statistics and the NAB survey is so large as to suggest something is amiss. One, or both, must be wrong.
The September-quarter NAB survey is due out later this month. It will again canvas the views of more than 260 property professionals. And it will again provide a first home buyer number vastly different to the official statistician's count.
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