One such group even went so far at to call for a home buyer's strike in 2011. There is no doubt that FHBs have deserted the market since 2009 with housing finance commitments running well below historical averages over an extended period.

And the release yesterday of December housing finance data returned FHB numbers to post-GFC lows. According to the ABS, the number of finance commitments to FHBs nationally slumped to just 6,557 in December 2012, which is the lowest recorded level since February 2011.

So is this trend and the recent figures indicative of a buyers strike?

At the state level, the slump in FHB commitments has been driven by big falls in New South Wales and Queensland, where FHB grants on pre-existing dwellings were axed in October 2012. Victoria, where FHB grants on newly constructed dwelling were wound-back in July 2012, has also taken a big hit over the past six months.

Western Australia, where immigration is highest, remains a bright spot for first home buyers. So, we can't say that whatever it is that is holding back FHBs is a universal strike.

Focusing on New South Wales and Queensland only, the number of FHB finance commitments have literally crashed, with commitments in both states running 50 per cent-plus below the levels recorded just prior to when the FHB grants were extinguished in October.

In fact, the number of New South Wales FHB commitments in December was the lowest in 21 years, whereas in Queensland it was the lowest since January 2011, when the state was affected by severe flooding.

So what we can say is that FHB's seem especially sensitive to fiscal incentives. Mortgage demand temporarily surged in response to the 2008-09 FHB Boost in the wake of the GFC, the expiry of FHB stamp duty concessions at end-December 2011 in New South Wales, and the recent October 2012 expiry of the FHB grant on pre-existing dwellings in both states. On each occasion, FHB demand has fallen away sharply following the expiry of these schemes.

On average it has taken four to six months for such givebacks to run their course before first home buyer activity bottoms. More worrying is that activity has not typically rebounded very strongly, unless more incentives are put in place.

The current shift of the first home grant from existing dwellings to new homes is a more permanent change to the grant system than in the past and it may just be possible that FHBs return even more slowly this time around, stalling an already slow and overdue property price recovery.

Australian first home buyers do seem on strike to the extent that the decade-plus grant system that has been in place has completely warped expectations vis-a-vis buying a property.

Of course the removal of the grants was long overdue and made perfect economic sense. As Australia's mining boom winds down, building more houses is one way to create the new jobs that will be needed.

Such grants may also help offset the dreadful planning bottlenecks that are in place for fringe development and help ease the housing shortage issue that plagues Sydney. There is also the now widely accepted truth that all the grants really did was drive up prices for FHBs, not really their intended purpose.

But the real reason, I suspect, that FHBs are still scarce in the property market is not so much that they are on strike as it is that they are locked out. Even after 175 basis points in interest rate cuts, housing affordability in Australia remains terrible. Here is the most basic measure of housing affordability, the ratio of mortgage interest payments to disposable income over time:

We have barely made it back to 2003 levels when speculation was driving prices to undreamed highs. Even with rates at 3 per cent, repayments are much more onerous than when interest rate were at 17 per cent in 1989.

Expect political recriminations to fly over first home buyers being ‘locked-out’ of home ownership, as well as increased special pleading from the property industry demanding that taxpayer funds once again prop-up the market.

Leith van Onselen is the Senior Economist at MacroBusiness. The site offers free 2013 forecasts for Australian property, Australian economy, the Australian dollar and the top ten shares picks for the year.