Still strong: Sydney property market will host 757 auctions this weekend. Photo: Tamara Dean
Sydney's residential property boom has delivered a record month of stamp duty receipts for the NSW government as the market prepares for what is expected to be the busiest auction weekend in history.
The surge in property sales may also hand a political windfall to the O'Farrell government, which is poised to reveal a stronger than anticipated financial position before the 2015 election.
Mike Baird: Good news for economy. Photo: AFR
Data published by the Office of State Revenue reveal $356.8 million in stamp duty poured into government coffers from residential property sales last month - the highest monthly figure since 2005-06 when records began.
Sydney's median house price is $722,718, meaning the stamp duty payable on purchase is $28,016.
The October figures follow a September quarter that saw stamp duty receipts easily outperform the same period last year.
The increase contributed to a surprise turnaround in the state's budget position for 2012-13. Figures released by Treasury last month showed the actual result was a surplus of $239 million instead of a deficit of $374 million estimated in the June budget.
At the time, NSW Treasurer Mike Baird said there was ''every chance'' of a similar turnaround to the forecast budget deficit of $329 million for the 2013-14 financial year. The continuing strong performance of the property market raises the prospect the Treasurer may be in a position to announce the budget is already back in the black when he hands down next year's statement in June before the 2015 election.
The full impact of the stamp duty boom will become apparent when Mr Baird delivers the mid-year budget update next month.
In his November update Mr Baird noted that economic indicators suggested the housing recovery in NSW ''still has a way to run''. ''Housing finance approvals have increased 9.1 per cent over the past year, with approvals for new homes up 29.4 per cent over the period,'' Mr Baird said.
''Trend private residential building approvals are running at an annual rate near 52,000 - the highest since 2002, while new home sales are 69.4 per cent higher than a year ago.''
On Friday Mr Baird said the recent tax boost was ''a positive sign for the state's property market, and is good news for the NSW economy".
But he also sounded a note of caution. ''While stamp duty is a particularly volatile revenue stream, we estimated strong stamp duty growth in our June budget and all signs suggest that growth is currently in line with our forecasts,'' he said.
"Certainly, any additional revenue will help to strengthen the state's balance sheet, but ongoing economic challenges suggest we are unlikely to see the same sort of growth in our other revenue streams.''
with Stephen Nicholls
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