Australia’s Housing market may not be as unbalanced as previously thought with the Australian Bureau of Statistics making a huge upward revision to its first home-buyer statistics.
The reason is simple: it was only counting people who accessed the First Home Buyer’s grant.
However, homes bought with this grant need to meet certain criteria which might not always be met in Australia’s supply-constrained housing market.
The ABS has blamed “under reporting by some lenders” for the error.
While Australians seeking to buy their first home are undoubtedly priced out of the market in many parts of the hot metro property markets, today’s announcement shows the number of first home buyers in Australia each month has been vastly under-reported for some time – by around 20%.
In data terms, this is an enormous error. For example, the number of first home buyers reported for May last year has been revised up to almost 8,700 from the previous official figure of around 7,100. And that’s just for one month.
From the ABS media release:
“The ABS has published first home buyer loan figures since the early 1990’s,” said Jacky Hodges from the ABS, “and initially we thought the fall off in first home buyer loans over the last two years was due to reduced affordability arising from changes in grants, rising house prices, increased investment housing loan activity and general economic conditions.”
“However, subsequent analysis and follow-up with lenders has confirmed that the drop was partly due to under-reporting by some lenders.” said Ms Hodges.
Importantly, the number of total housing loans, which are reported separately, are not affected by this change.
Here’s the chart, with the blue line showing the revisions.