A sharp increase in house prices is likely to have an impact on the Reserve Bank (RBA) board, who will decide on interest rates this afternoon.
The RBA is tipped to raise the official interest rate by a quarter of a percentage point, or 25 basis points, taking the official cash rate from 4.25 per cent to 4.5 per cent.
The increase will add an average of $46 to the monthly repayments on a $300,000 25-year home loan.
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House prices in the country's capital cities rose by an average of 20 per cent in the past year, making it one of the biggest surges in more than two decades.
Interest rates too have been on the up, rising steadily since October, when it was at a half a century low of 3.0 per cent.
The five interest rate rises since then have added about $240 to the average mortgage.
The RBA is likely to raise rates to keep the economy from overheating, given the surge in both home prices and inflation.
