Pain is being felt across the property industry according to KR Peters Director Peter Nicolls after the Reserve Bank (RBA) moved on Tuesday to increase the official cash rate by another .50 basis points.

The rise was the latest in a series of steep increases as the bank works to bring inflation back within its target range of 2 to 3 per cent. Inflation in the June quarter was 6.1 per cent and Mr Nicolls believes it could peak at 8 per cent before starting to fall at the end of the year or early 2023.

The latest rise brings the official rate to 1.85 per cent and pushes variable interest rates offered by most lenders well above 3 per cent from historic lows when rates were slashed to protect the economy during the pandemic.

Mr Nicolls said the Reserve Bank was "pulling out all stops to slow inflation down" but he says consumer spending isn't the main problem.

"The inflation we are seeing at the moment is not to do with controlling interest rates to slow spending. Come September the fuel excise will go up exorbitantly when the 22 cent per litre excise is restored and the war in Ukraine is also unsettling everything. These are not factors the RBA can control.

There is also the threat China poses to Taiwan, plus we have had so many people leave the state because of lockdowns and the way the pandemic was handled in Victoria."

Mr Nicolls says rising interest rates have caused a dramatic shift in the property market with buyers who were previously rushing to secure properties because they feared missing out, now much more cautious and fearful not knowing where interest rates will peak.

"Buyers are running scared worried that the Reserve Bank is going to keep putting up interest rates," said Mr Nicolls.

"People are also taking a lot longer to get finance approved. Before Tuesday's rise buying power was down $100,000. Interest rate rises have definitely started to limit spending power.

"The level of enquiry has reduced. There are still properties being sold, but buyers are being a lot more cautious, careful and selective in looking for what they want."

Mr Nicolls estimates that prices have fallen by up to 15 per cent across the board.

CoreLogic data released this week found that Australia's housing downturn escalated in July, with national home values falling -1.3 per cent. In Melbourne values fell -1.5 per cent.

The slowing trend is also supported by Australian Bureau of Statistics data which revealed new loan commitments for housing fell by 4.4 per cent in June. The value of new owner-occupier loan commitments fell 3.3 per cent while new investor loan commitments fell 6.3 per cent.

Despite this, loans remained at historically elevated levels of $31 billion.

Mr Nicolls warned buyers to brace for more interest rate pain saying he doesn't believe even the RBA knows where rates will peak.

It's a sentiment backed by the RBA Governor Philip Lowe who confirmed the board "expects to take further steps in the process of normalising monetary conditions over the months ahead".

"The size and timing of future interest rate increases will be guided by the incoming data and the Board's assessment of the outlook for inflation and the labour market. The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time," Mr Lowe said in a statement released on Tuesday.

Mr Nicolls says at the end of the day homes will still be bought and sold as "people still need a roof over their heads", but it is an unsettling time for both buyers and vendors.

"It is very hard to predict where we will be in six months time. I just know right now it is pain, pain, pain."