The property market slowdown could punch a $1 billion hole in the Victorian state budget this year, with a leading housing economist revealing a slump in property sales of up to 20 per cent across the state.

The collapse in sales volumes, with tens of thousands fewer properties changing hands this year, could cost the state’s Treasury up to a $1 billion in stamp duty payments it had been expecting to collect, potentially a bigger hit than that caused by the Global Financial Crisis a decade ago.

Fewer house sales are having an impact on the state budget. Credit:Fairfax Media

The figures prompted a warning from another leading economist that stamp duty-dependent states such as Victoria and NSW will have to rein-in spending as the streams of property taxes dry-up.

Predictions of stamp duty revenue to state government coffers have already been written down once this year, from $7.1 billion to $6.5 billion, partially offset by a projected $300 million boost to land tax receipts.