House sales slump as interest rates rise

Darren Disney from the Association says first-home buyers are feeling the brunt of interest rate rises.

"The rate rise saw the average mortgage in Victoria increase by around $40 a month which would have pushed more people out of the market or would have made some people tentative to actually enter the market," he said.

"The August interest rate rise would have forced even more home buyers into that mortgage stress level where they pay over 30% of their household income on their mortgage."

"A lot of first home buyers are getting pushed out of the market and that's a concern because that puts greater pressure on the rental market pushing rent up." © 2007 Australian Broadcasting Corporation