Great Australian Dream is alive - first home buyer stats debunked: Terry Ryder

A NAB survey of residential property markets provides further evidence that media reporting of first home buyer activity is bunkum.

The NAB survey finds that 25% of established homes sold are being bought by first time buyers and that 24% of new homes are bought by first timers.

Some media outlets reported those figures rather nonchalantly last week, without realising the great significance of them. They make nonsense of the data published by the Australian Bureau of Statistics (ABS), which suggests that first home buyers (FHBs) are as low as 10% of properties sold.

That ABS figure is held up repeatedly by commentators and journalists as justification for the claim that the 'Great Australian Dream' is dead, that we have an affordability crisis and that everyone from local investors to Chinese buyers are to blame for pricing FHBs out of the market.

It has also helped to generate a lengthy, expensive and totally pointless federal government inquiry into the so-called housing affordability crisis. That inquiry, which has been exploited by some politicians as a vehicle for grandstanding and career advancement, is based on a lie: that FHB activity is at an all-time low and it’s all because they can’t afford to buy.

The NAB is right and the ABS is wrong. First time buyers are out there as busy as they ever were. The ABS has been publishing a miscount – and, what’s more, it knows it. It has admitted that its data on first home buyers is suspect.

I’ve explained why a number of times in this column and so too have other writers on Property Observer. The elimination, by most state and territory governments, of FHB grants for established housing (they now provide grants only for new dwellings) means most FHBs are not being counted any more because they’re not applying for grants.

They’re out there buying but are no longer identified as first timers in the ABS statistics.

Now the NAB survey has put some realistic numbers on first time buyer activity. Its survey suggests that, for established housing, 16% of buyers are first home owner occupiers and 8% are first home investors. For new housing, 16% are first home owner occupiers and 9% are first home investors.

First home investors are those who opt to buy an investment property, rather than a home, as a first purchase. Commonly, these are people who prefer to rent in their suburb of choice and buy an investment property in a cheaper area.

This really is a top story for an alert journalist. All the clamour about an affordability crisis and first time buyers disappearing is a furphy, based on a miscount. But most newspapers won’t write the real story because they’re addicted to the “Great Australian Dream is dead” storyline. Sad.

For the record, the NAB survey also finds that overseas buyers are 9% of buyers of established housing and 15% of buyers of new dwellings (mostly inner city apartments).

This puts into perspective those hysterical claims that foreign investors are somehow dominating our markets and pricing poor young Aussies out of the market.

TERRY RYDER is the founder of hotspotting.com.au. You can email him or contact him on Twitter.

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