Despite recoding a fall in sales for the second consecutive month, house prices across Australia have hiked for the month of October, as has been confirmed by official figures shared by the Housing Industry Association. In October, the sale of residential properties fell by 6%.

According to the association, the decline in sales has been a direct result of higher interest rates and a fall in the number of first time buyers.

"A decent and sustainable new home building recovery needs strong momentum from private sector trade-up buyers and investors and we seem to be falling short on that score as we near the end of 2009", shared HIA's Chief Economist, Harley Dale.

The HIA has also pointed out that with the "narrowly based private sector recovery, costly delays in planning approvals, and reports of land shortages beginning to re-emerge" there is every possibility that during the coming year, the number of newly built residential properties would fall well short of demand, keeping in view the rapidly rising Australian population.

Prices, have nonetheless, continued rising, and they have not been affected by fall in sales. Melbourne and Sydney recorded the most hikes, with Melbourne recording a 4.5% rise in prices of homes and Sydney boasting a 3.2% rise.

So far this year, house prices across the country have recorded a 10% increase.