The increase came as home builder Metricon announced it would shed about 10 per cent of its staff, which follows the collapse several major construction companies earlier this year.

The latest rise means the RBA has hiked rates by 175 basis points in four months and a survey found 1.7 million Australian households were already in mortgage or rental stress.

According to RateCity, a 0.5 per cent hike to a 4 per cent loan on $350,000 over 20 years would add an extra $91 a month. The repayments on a $750,000 loan would be an extra $195 a month at $4545.

Analysts said the combined rate hikes would likely cost the average Australian homeowner an extra $610 per month compared to what they were paying in April.

Economists said the statement from the RBA showed it had upped its inflation forecast in line with Treasury “but downgraded economic growth for 2022 and beyond”.

Data out from the Australian Bureau of Statistics also showed previous rate increases along with the cost of living were having an impact, but falls were slight.

Building approvals were slowing and home lending was also impacted, but still at historically high levels and more than 50 per cent above pre-Covid levels.

But in other areas of lending there were major falls as people cut back on expenditure. Lending for cars fell by 14 per cent in June and 37 per cent for personal investment.

Significantly, RBA Governor Philip Lowe said there was no pre-determined course.

“The board expects to take further steps in the process of normalising monetary conditions over the months ahead, but it is not on a pre-set path,” Lowe said.

ANZ said it expected another three rate hikes this year bringing the benchmark cash rate to 3.35 per cent, but AMP Capital’s Shane Oliver said it would peak at 2.6 per cent and a 3 per cent cash rate would “crash the economy”.

First home owner lending has fallen to near pre-Covid levels.

Lowe also forecast inflation would peak later this year at 7.75 per cent and start to fall as global supply chain issues were resolved. He expected it to be about 3 per cent by 2024, which would put it back in the RBA range.

“The bank’s central forecast is for GDP growth at 3.25 per cent of 2022 and 1.75 per cent in each of the following two years,” Lowe said.

“The bank’s central forecast is for unemployment to be around 4 per cent by the end of 2024.”

IFM economist Alex Joiner said the there was trouble ahead for the Federal Government.

“The RBA’s GDP forecasts combined with Treasury’s population growth forecasts (as in the Budget) suggest per-capita growth rate will be below the mediocre performance that defined the period between the GFC and pandemic. This is the challenge for governments going forward,” he said.

The value of new loan commitments fell by 4.4 per cent in June to $31 billion. New

Shane Oliver: Aust June building approvals fell a less than expected 0.7%mom. Further downside is likely as demand was brought forward by incentives and as rising mortgage rates impact. Renovations approvals fell 2.2%mom and non-residential approvals fell 6.1%.