The recent interest rate rise in Australia has had an instant impact on the countrys housing market.

Reports suggest that sales slumped in Melbourne and Sydney, by 25% and 33% respectively, during the first two weeks of August.

Richard Movsessian of Century 21 Coastline Properties, located in Sydney said: "The number of people coming through has halved. Theres absolutely nothing happening out there.

"Theyre (applicants) making offers, the clients accepting the offers, and then theyre pulling out because they think prices are going to drop."

Only 49.6% of properties auctioned in Melbourne last weekend were sold, according to Australian Property Monitors.

In Sydney, the auction clearance rate was 44.7%, a fall of 6.6% on the success rate achieved the weekend prior.