Historically, the housing market has not been affected much by price variations compared to other popular assets people own. This phenomenon could be mainly due to the nature of the transaction – enormous costs with purchasing a home, holding, and maintenance costs.
Recessions can lead to an increase in unemployment and lower household income. In recessionary environments, home buyers and real investor investors tend to be defensive, lacking the certainty required for a significant investment like a house purchase.
A small change levied on stamp duty, or any other forms of taxes set on homes can increase the cost of houses. An increase in taxes can suppress the housing market, making purchases more expensive, and for investors with an existing real estate portfolio, increased taxes can be even more burdensome.