Has the first home buyer crisis been exaggerated?

Has the first home buyer crisis been exaggerated?

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The Australian Bureau of Statistics has admitted a 26 per cent error in its first home buyer statistics.

A new reporting method has revealed there are more first home buyers in the market than previously thought.

The latest housing finance figures, for November 2014, originally claimed there were 6,061 first home buyer loan commitments.

However, the new methodology has seen that figure updated to 7,627, an increase of 26 per cent.

There has been much talk in recent months of a first home buyer crisis, with their share of property purchases reportedly at an historic low.

ABS regional director Jacky Hodges said it was initially assumed that the reduction in first home buyer numbers over the last two years was due to reduced affordability.

“However, subsequent analysis and follow-up with lenders has confirmed that the drop was partly due to under-reporting by some lenders,” she said.

An ABS investigation found that some lenders were failing to classify borrowers as first home buyers if they did not receive government grants.

The ABS is working with the prudential banking regulator, APRA, to ensure all loans to first home buyers are recorded in the future.

In the meantime, the ABS will adjust first home buyer data for this under-reporting using estimates based on data provided by lenders that reported correctly.

[Related: REIA calls for first home owner grant reform]

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