With stock prices certain to fall today after Wall Street drove stock prices down close to 3% on Friday, more bad news for share prices could happen on Thursday. But house price falls could get a break from the New South Wales government that could easily set the scene for other governments to follow.

To recap, the Yanks showed that 2.75% worth of central bank interest rate rises haven’t slowed the economy enough to kill job creation, with 263,000 jobs created in September. This took unemployment down to 3.5% from 3.7%. The conclusion was that inflation hadn’t dropped enough to stop the Federal Reserve with its 0.75% interest rate rises.

While this isn’t good news for stock prices, the Perrottet Government could be introducing a change to stamp duty that could be a big plus for house prices at a time when some experts are tipping a 25% or 30% slump in prices over the next two years.

The SMH’s Lucy Cormack explained this interesting stamp duty play for first homebuyers. “If the reform passes both houses in the 15 remaining sitting days of the year, eligible buyers who purchase on or after January 16 will be able to pay an annual levy of $400 plus 0.3 per cent of the land value instead of stamp duty on properties worth up to $1.5 million,” she said.

When I interviewed the Premier last week, he said he’s confident of getting this up in Parliament.

Stamp duty can be an enormous slug, especially to young borrowers, and lenders take this into account when they borrow to buy a property.

Other important points around these proposed changes to stamp duty include:

1. 6,500 homebuyers are expected to access this option

2. Current stamp duty concessions for first home buyers on purchases of up to $800,000 will continue.

3. 50% of homebuyers sell their properties within 10.5 years.

4. Future buyers won’t be forced to maintain the alternative to conventional stamp duty payments.

5. If you sell the property after say two or three years, you won’t have to make up for the stamp duty you’ve saved!

6. If the first homebuyers turn the home into an investment property, they’ll pay an extra $1,500 and a 1.1% levy per year.

So how does this help stop house prices falling by 25% or more?

In the first place, if more buyers attend auctions and open homes because they’ll pay less stamp duty, that will help put a floor under house price falls. And it will encourage more homebuilding for first homebuyers. If other governments follow suit, there could be a lot more buyers for properties going forward.

It will come as the Federal Government is set to increase immigration intake, which will be another floor for home prices.

Last week, REA economist Anne Flaherty said her team is expecting a 10-15% fall in national home prices, and little changes like this from Premier Perrottet is bound to help contain the extent of the fall in home prices.

The big question is this: will the NSW Parliament give it the thumbs up?

The smarties say ‘yes’, despite Labor opposing the idea.