Stamp duty receipts for the New South Wales government continue to fall, reflecting the impact of weaker home prices in Sydney, falling turnover levels as well as the introduction of stamp duty discounts for first time buyers in the middle of last year.
As seen in the chart below from Macquarie Bank, total stamp duty received over the past 12 months has now registered its largest percentage drop since the GFC. While not as steep as the drop in total receipts, those duties received for residential land transfers have now exceeded the annual percentage decline seen during the GFC.
However, with home prices now significantly higher than they were a decade ago — even with recent falls — and an increase in housing stock in the state over that period, total stamp duty revenue for residential transfers is still significantly higher than the levels seen earlier this decade.
In the June state budget, New South Wales treasury predicted that residential stamp duty revenue would fall to $5.6 billion in the current financial year, driven primarily by lower turnover, rather than prices which it forecast to fall 7.5% from peak to trough.
According to updated figures from CoreLogic, Sydney home prices have already fallen 8% from their cyclical peak of last year, with few signs the declines are moderating at this point.
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