Property crash to wipe $8b from NSW Budget

By Leith van Onselen

For five years, the NSW Budget reaped the windfall of an epic stamp duty boom, which saw receipts more than double from around $3.8 billion in 2011-12 to a peak of $9.0 billion in 2016-17. In 2017-18, stamp duty receipts retraced marginally, but was projected in the State Budget to remains at similar elevated levels all the way to 2021-22:

This surge in stamp duty also drove the share of New South Wales tax revenue from property up from around a third to nearly 45% between 2011-12 and 2016-17:

However, the epic property bust rolling-out across Sydney, which has seen property prices and transactions dive 10.3% and 31% respectively from peak (see below chart), has driven an $8 billion hole in the NSW State Budget. From The SMH:

The state’s half yearly budget review on Tuesday will… show the government has written down expected stamp duty revenue by $2.5 billion over the four years to 2021-22 due to the softening housing market and tightening lending conditions. That follows a $5.5 billion reduction over four years announced in the state budget, bringing the total write down since June to around $8 billion.

Bye bye big infrastructure spending and public spending. Hello austerity.

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Leith van Onselen


  1. Don’t worry. It’s not like government spending is contributing to GDP or employment. So there’s no danger of a negative feedback loop here.

  2. Whoever wins power at the next election, almost guaranteed every government asset or public service will be up for sale.

    • TailorTrashMEMBER

      “The sale of assets is common with individuals and states when they run into financial difficulties. First, all the Georgian silver goes, and then all that nice furniture that used to be in the saloon. Then the Canalettos go.” Harald Macmillan

      The Canalettos are long gone and all Gladys has left is the old faded lounge in the sunroom …….No doubt that will be hocked ….

  3. There is not going to be any money to build the roads schools and hospitals needed for a bigger population.

      • Do you live in inner sydney? I do. That catchment includes lots and lots of public housing in Wooloomooloo and Surry Hills, and there is even public housing in Paddington.

        The local high school for those inner city areas was Dover Heights or Balmain – both miles away. I get that folks in Redfern are disappointed as Alexandria Park is going to be their school, but that’s what happens with the population ponzi.

      • Thanks for the map Dan which confirms my comments – I said lots in W and SH and *some* in Paddo. Your map has plenty of public housing in W’loo (22%) and Surry Hills (11%) … and yes there is even some public housing in Paddo (1%) – quite a few blocks of flats – I would walk past at least one of them every day. And the map must round down as there is also a block of public housing in Woollahra and that says zero but I can even give you the address!

        The reason the Dept of Education has drawn the boundaries like this is a lot of folks in that catchment will go private anyway, so it won’t get oversubscribed too early. They will review the boundaries going forward.

      • Most middle class parents will happily save on private school fees and go public if it is a “good” school i.e. not too many povvos – especially those from indigenous or non-english speaking backgrounds. The “proof” of a good school is in its NAPLAN and ATAR results, but you could just look straight at the ICSEA and this will have an extremely good correlation. This school looks like it has had its catchment boundaries engineered to ensure a good ranking. Higher property values for everyone within the catchment will see the state government eyeing the public housing in Woollomooloo to do as they did with Miller’s Point.

    • This is why the LNP’s insistence on spending billions on two new sport stadium is criminally stupid. The election in March next year will be fought on ‘Stadium vs School’.

  4. They are so far off. Half of it comes from off the plan 3 years ago. In 2 years it will be 75% from highs.