Depending on who you want to believe, FHBs are running at around 25 per cent of the total home-buying market and maybe more than that of new dwellings. A closer inspection of the ABS' own figures shows the reality is a great deal more than that misinterpreted "14.5 per cent". FHBs are running at around 25 per cent of the total home-buying market and maybe more than that of new dwellings. A closer inspection of the ABS' own figures shows the reality is a great deal more than that misinterpreted "14.5 per cent". Credit:Paul Rovere Rather than being belted down by foreigners and investors last year, it looks like FHBs were buying with their ears pinned back. It was a single sentence buried in the Reserve Bank's latest quarterly statement on monetary policy that belled the FHB surge. "The number of first home owner grants paid for new dwellings has continued to trend higher, increasing by 22 per cent over the past year," noted the RBA. That's rather spectacular growth.

The NSW Finance and Service Department collates first home owner grants from all the states. A spokeswoman said 36,379 such grants were provided for new homes in Australia last year, up from 29,691 in 2013 - actually a rise of 22.5 per cent. NSW first home owner grants soared by 29 per cent to 7,958. The first home buyer hasn't been quite the endangered species he and she have been made out to be. Credit:Louise Kennerley First home owner grants only tell part of the story. It was reliance on figures generated by grants that got the ABS into trouble in the first place and saw the RBA stop using the ABS numbers in June. Most grants are now limited to new housing. In theory, they only capture FHB owner occupiers, not FHBs who are joining the landlord class. And they miss cashed-up FHBs paying more than their maximum allowed by their particular state - $835,000 in NSW, $750,000 in Victoria and Queensland. (While capped as to the value of the home, the grants are not means tested, so that quite wealthy individuals or those substantially staked by rich relatives can still grab up to $15,000 from the tax payer in NSW and Queensland or $10,000 in Victoria. But that, and who really ends up benefitting from such grants, is another story.) Though only a partial guide to the extent of FHB activity, that 22 per cent surge in grant activity is a guide nonetheless and should ring alarm bells about the usual FHB story. It might be comparing oranges with mandarins, but they're both citrus. The latest National Australia Bank quarterly residential property survey is the first to try to count FHB investors as well as owner occupiers.

NAB reckons FHB owner occupiers made up about 17 per cent of new housing buyers in the December quarter, but FHB investors accounted for about another eight per cent – thus, 25 per cent of the new home market. Meanwhile, the ABS counted 108,767 loans last year to owner occupiers including FHBs for the purchase or construction of new dwellings. Recall here that the states gave FHBs 36,379 grants – equal to a third of the loans total. (There are differences in the timing of grants and purchases and some FHBs paid cash - the ABS only publishes finance commitment numbers - so this is getting a little closer to comparing apples with oranges, yet we're still well within the reasonable-to-consider fruit aisle.) And then there are the FHBs buying grant-less established homes. NAB's residential survey of property professionals estimated FHB owner occupiers accounted for 16.1 per cent of established housing purchases in the December quarter and FHB investors bought 9.3 per cent – much the same total percentage as for new housing. With existing-to-new home sales running at about three to one, the NAB survey shows FHBs outnumbering Australian investors. They swamp foreign buyers by a ratio of five to two.

But wait – there's more. To use the latest available month, December, as an example, that much-quoted and freshly-revised ABS "14.5 per cent" is the percentage of FHB loans out of total owner occupier dwellings financed. "Dwellings financed" includes a whole pile of dwellings being refinanced – owners changing their loans but not their homes. The ABS counted 8,213 FHB loans out of 56,795 owner occupier dwellings financed – hence 14.5 per cent. But of the dwellings financed, 19,429 were refinancing. The ABS count of FHBs therefore represented 22 per cent of loans for dwellings purchased by owner occupiers. Thus the "14.5 per cent" has always been a beat up, to use the technical journalistic term. Yet a good scary story will always run. For example, Commsec, which really should know better, was quoted quoting the 14.5 per cent this month as "a 10-year low". So how has the ABS revision worked out? By the smell of it, they're still a couple of bricks short of a retaining wall.

Having reworked the numbers for the past two years, the ABS' best revised estimate is that there were 94,554 FHB finance commitments in 2014, down 4 per cent from 98,202 in 2013. In light of that 22 per cent lift in first home owner grants, I somehow doubt it. The NAB guess of about 25 per cent might be more reasonable. None of that means it's not difficult for people to get on the residential real estate ladder, especially in the hot Sydney market. It does show the disproportionately-covered FHB hasn't been quite the endangered species he and she have been made out to be. Note: An earlier version of this story mistakenly took the ABS figure for owner occupied home loans as all home loans Follow us on Twitter @BusinessDay