Australian homeowners did not see the spate of rate hikes coming and more than half believed the figure would not climb so high.
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The Reserve Bank upped the official interest rate to 2.6 per cent this month.
It was the sixth straight month rates have risen after being as low as 0.1 per cent in May.
Other Lendi Group data detailing consumer activity between May and September found refinancing inquiries were soaring after the rate rises.
They've seen 157 per cent more inquiries on rate-rise Tuesdays compared with other Tuesdays and 107 per cent more on Wednesdays after hikes.
Meanwhile, home sales have fallen by 15.7 per cent.
That's the weakest quarter since June 2020 and Australia's lockdown, which helped create the first recession in almost 30 years.
"This reflects the increasing weight that the RBA's tightening cycle is placing on home buyer borrowing capacity," HIA economist Tim Reardon said.
"The RBA increased the cash rate again in October, and this will further accelerate the decline in new home sales."
Growth in apartment rents is outstripping houses as budget-conscious tenants are priced out and foreign students return.
Capital city units saw the highest quarterly and annual growth ever recorded by Domain, with the rental squeeze showing few signs of easing.
Unit rents were up 6.5 per cent over the September quarter and 16.7 per cent annually.
House rents lifted 1.9 per cent over the quarter and 12.8 per cent for the year.
Rapid growth in house rents has priced out some renters who are now looking at the more affordable rental market, adding to demand for flats.
The return of foreign students has also ramped up demand for units, Domain research and economics chief Nicola Powell said.
Dr Powell said the rental crunch had been caused by both restricted supply and boosted demand.
She said higher migration and changing household formations were adding to demand, with higher borrowing costs also stopping some households exiting the rental market for home ownership.
On the supply side, she pointed to delayed building projects, weaker investment activity and landlords flipping households on to the short-term rental market as tourists returned.
"The consecutive run of interest rate hikes may have also pushed some landlords to pass on additional home loan costs," she said.
One positive is that gross yields are also at their highest point on record, which should attract more investors and boost supply.
Dr Powell said commonwealth rent assistance was falling behind rental increases and called for a rise in payments for low-income households.
She also voiced her support for encouraging private investment in housing, including affordable housing.
Australian Associated Press
