David Airey

It is important to note that the September quarter data does not reflect the results of the subsequent three interest rates rises.

"Since economic recovery showed those first green shoots, the REIA has continually warned that despite the early and promising signs, rapid interest rate increases have the potential to dampen the market and stifle recovery. With this in mind, housing affordability could decrease even further in the next quarter, which is a major disappointment for Australians," said Mr Airey.

"We also have the issue of a housing supply shortage, which is not helped by higher rates. It’s a big issue for the Federal Government who will be aware of the potential damage these sudden rate increases will cause not only to the 200,000 first home buyers who have bought a home in the last year, but also to developers and builders." continued Mr Airey.

"The tables appear to have turned very quickly in the Australian housing market, and from a period of extremely low interest rates and high housing affordability, we appear to again be facing escalating interest rates, and no ease in sight for property prices," said Deposit Power National Manager, Mr Keith Levy.

The September quarter report has also recorded a slowdown in the total number of housing loans, particularly those to first home buyers, who have benefited from the First Home Owners Grant Boost (FHOG Boost).

"Factors such as tighter lending criteria and a decrease in demand in certain segments of the market could explain the deceleration in the number of housing loans," concluded Mr Airey.

Rhiannon McClelland REIA Manager Communicationsn 0421 422 919