The First Home Owner Grant data released by the Office of State Revenue today indicates a dramatic fall in first home buyer activity since December last year.

At the end of last year the Federal cash boost for first home buyers was removed, which saw supplements of $14,000 and $21,000 no longer available to this section of the market.

The system has since reverted to a single payment of $7,000 to first time buyers.

According to the OSR, grant application numbers for established dwellings in January (695) and February (692) are now equivalent to those of the historic low points of June 2004 (679) and February 2007 (691).

These earlier low points preceded the introduction and increase, respectively, in first home buyer stamp duty relief in July 2004 and May 2007.

The June 2004 figure was artificially low as the State Government announced in May of that year that stamp duty relief for first home buyers was to be included in the pending June budget. This alert curtailed activity for several weeks as first home buyers held back for the concessions which came in on 1 July 2004.

Real Estate Institute of Western Australia President, Alan Bourke, said the results were concerning and probably pointed to two key themes:

“These data suggest that the Federal boost pulled forward many first home buyers who might otherwise have waited which means current would-be buyers are fewer in number and will be for a while.

“But it also suggests that the recent climb in interest rates has seen some potential first home buyers reconsider and withdraw from the market,” Mr Bourke said.

Mr Bourke said it was unclear how long the lull in first home buyer activity would last, but if it was sustained it may adversely impact on the established housing market.

“A lack of first home buyers makes it harder for investors and trade-up buyers to sell their existing stock and move on.

“This situation can create a domino effect and we may see some slow-down in the regular market later in the year if first home buyers are still thin on the ground,” Mr Bourke said.

OK - granted I'm no real estate expert, but what's going on in the current real estate market ... in Perth? in Australia?

In 2006 we witnessed a generational run up in property prices (46% growth across Perth metro), and a tightening of the market with record low numbers of properties available for sale. Anything that listed for sale sold in hours, agents has weekends off with nothing to 'open' and up, up, up went the prices. People said it couldn't last... and they were right (eventually), but prices went up another 16% in 2007.

In 2008, it all got rather nasty (I suppose it had to - the higher the rise, the harder the fall?). The property market  - certainly in the higher end of Perth - went dead. In some suburbs hardly a whisper of a sale went by, month after excruciating month. The world endured an unprecedented global financial crisis ("GFC"), which sorely affected those economies with relatively large financial sectors (UK, Iceland, USA); but in some ways, Australia - although experiencing a slower time of it - was isolated from the real nasties.

While this was going on (most of 2008 and early 2009), sellers either took their properties off the market or dropped their prices; and new sellers came in with more realistically-priced homes. Everyone started to realise that 2006 was over, it was a different market altogether.

As the world started to realise that maybe the worst of the GFC was over (all it took was enough people to think the worst was behind us and this feeling to spread), so confidence started returning to the market (sometime after March 2009) and with prices having adjusted downwards 20% or so, sales reappeared. Real estate agents pretty much sold all their remaining stock of properties during the 3 months of August - October 2009. The total number of listings fell and the market tightened again.

Which brings us to today, with (the 'other news' apart from ETS and the Libs) the Federal Reserve just having risen interest rates for the 3rd consecutive month (which is unprecedented by the way, the 2nd time I've used that word in this blog post... another record). Are we heading for another trip? A double dip recession? Did we get overly exuberant about the recovery? Do we need dampening down? Or are we going to learn from history and slowly rise out of the current market situation? Or are we OK?

What is happening? ...

In a sign of the times, and what must have been a difficult decision, REIWA (The Real Estate Institute of WA) has announced that today's Homebuyer magazine will be the last.

A fixture in the home buying scene for three decades, this full colour weekly glossy real estate magazine has fallen victim to the perpetual and inevitable shift of advertising dollars from print to online.

As REIWA President, Rob Druitt, noted "Closing the Homebuyer is like losing an old friend, but the reality is that more agents and most of the public are now using the internet to list properties for sale or to search for homes to buy."

aussiehome.com would like to salute the Homebuyer and REIWA (has any other Real Estate Institute published such a thing for such a sustained period of time?), and hold the publication with some affection (we get our copy sent to us every week). Some aussiehomers used the Homebuyer in the past to look for property, and some even advertised in it (those who had a former life as real estate agents).

Homebuyer, R.I.P. ...

'Google Real Estate' launched (quietly) last Monday, 1pm, EST, and has set the industry abuzz with discussion about what impact it will have on the online real estate industry, and the larger property portals in particular.

Google now takes property uploads from anybody, for free, and serves them up within its site in the MAPS section (then choose real estate or go to http://maps.google.com.au/realestate).

Interestingly, it chose Australia to launch this product (Google Maps were developed in Sydney). We've been testing the upload and have found it to be very clean and easy - once a day (that's all they allow), and it refreshes everything everyday (so no old listings or out of date stock can hang around). That's a neat idea.

So - we have the most visited site in the world now showing properties in a search. All on funky interactive maps (aussiehome.com has had interactive maps since day one!).

Some have called this a game changer - it could be, but like the best game changers, we feel it will not happen overnight, but will slowly drag away revenues from the major portals, in the same way revenue has fallen from the print media towards the internet. aussiehome.com gladly uploads all its listings to Google Real Estate, so our clients get more traffic (views are directed back to the feeder web site anyway.)

Do check out the site - what do you think?