The Gold Coast Bulletin reports from Australia. "Interest rates have hit their highest level in six years and Prime Minister John Howard says the pain for households is necessary to get inflation under control. But leading industry figures have warned there will repossessions 'within weeks' as a result of yesterday's interest rate rise."

"Gold Coast independent property valuer Iain Herriot said the rate rise was 'really bad news' for the investors who had stretched themselves to buy investment properties. 'In a matter of weeks you'll start to see investors selling their rental properties so they can hold on to the family home,' said Mr Herriot."

"'It's particularly prevalent in those new estate areas where people have been sold house-and-land packages that quite simply don't add up in terms of market value,' he said. 'When they go to put their investment property on the market in the next couple of weeks because they can't afford this interest rate squeeze, they are going to get a very rude shock.'"

"Leading valuer LandMark White said the rate rise would 'murder' the Queensland property market. Mr Herriot could see some benefit to first home buyers.'I think their Christmas stocking will be full of decent buying, unfortunately though it will be at someone else's expense,' he said."

The Australian. "Low-doc, no-doc, half-a-doc loans. Any-doc-will-do. Get rich quick. On the outskirts of Sydney and Melbourne, things are getting ugly. 'For Sale' signs abound."

"What they don't tell you is who's selling. The banks, you see, are telling the agents not to disclose the vendor, to not say a word. The bulk of these sales are mortgagee-in-possession jobs."

"An ABC crew toured the western Sydney arc from north to south last week. Its findings were disturbing. The bulk of house auctions were mortgagee-in-possession sales."

"Agents said it was the worst they'd seen it: negative equity everywhere, locks changed, savings lost. One house in western Sydney suburb Fairfield, a three-bedroom weatherboard number, had just been passed in at auction for $279,000. The bank was the vendor. It had been sold for $560,000 just 18 months earlier."

"The banks are calling in their loans, folks. The credit binge is kaput and the waking hangover will be so bad the lawyers will be sorting it out. Who will sue whom? Mortgage brokers, banks, non-bank lenders, lawyers, mortgage insurers, dodgy valuers. Pick a box."

"What of the banks and other assorted credit spruikers? Did they exercise the required care, outsourcing their sales to spivvy operators who loaded up their prey with home equity withdrawal products while rates rose and household disposable incomes sank? They'll blame the brokers."

The Sydney Morning Herald. "The managing director of property research firm Braxton Chase, Andrew Donnelly, said there were plenty of bargains in the market as higher interest rates force vendors to slash property prices."

"'We are regularly coming across developers selling at up to 20 per cent below current valuation,' he said."

"Mr Donnelly said investors were becoming more aggressive, and in Sydney had been known to put in offers of $320,000 to $330,000 for properties valued at $400,000."

"'And they're being accepted simply because vendors and particularly developers are not able to afford the holding costs that these rate rises are putting on them,' he said."

"Mr Donnelly said that while mortgage repayments would rise as a result of Wednesday's interest rate increase, which pushed official rates up to 6.25 per cent, the increase would have only a minor effect on investor returns."

"'In most cases any increases will be significantly outweighed by the capital gain that can be made from buying at a major discount,' he said."