The spectre of rising inflation and interest rates have done little to dampen the Australian property market, as yet. But another interest rate rise from the Reserve Bank of Australia this week - the third in six months - will cause more pain in the Australian mortgage belt and could have a flow-on effect to the property hot spots.
The Reserve Bank's cash rate is now at 7.25 per cent, a 13-year high, and mortgage rates are likely to nudge 9 per cent.
Despite this changing economic environment, the Australian housing market delivered double-digit returns last year, with the national rise a significant 12.3 per cent.
The best performing capital city markets were Brisbane, where prices surged by more than 21 per cent, and unheralded Adelaide with 18 per cent.
Perth, which had been the market darling of 2005 and 2006 as the resources boom pushed prices higher, was the worst performing with a rise of only 1.1 per cent.
The figures, however, are deceptive. They mask a two-tier market where prices in outer suburban mortgage belt areas, largely unserviced by public transport, are in free fall, while established inner city suburbs of Sydney and Melbourne have continued to climb sharply.
As the rates have risen, stories profiling streets where people are selling houses and taking major losses have become commonplace.