Houses in regional areas rose 11 per cent over the last year compared to a 5 per cent gain in the capital cities, according to CoreLogic.

People have re-evaluated their quality of life as noted last week, and are looking for better, more comfortable homes in less congested areas.

Houses have risen more than units, especially inner city units.

Ultra-low interest rates are a major reason for the price rises in all properties over the last year.

Even at the current high prices homes are affordable with interest rates so low.

However, the last year's price gains are surprising considering two other factors.

First, there are no new immigrants recently arrived in Australia seeking to buy homes.

That's a dramatic reduction compared to early 2020, and it's reducing demand for houses.

Secondly, the Reserve Bank says new loan approvals for owner occupied housing have risen much faster over the last year than new loans for investment properties.

Perhaps due to the pandemic, fewer people are trying to build their wealth by investing in housing.

That has also reduced demand.

Houses are affordable at extreme low interest rates, provided you have a deposit.

First home buyers can afford the payments, but they must save a much larger deposit due to the high prices.

On a $600,000 purchase they will need $60,000 to $90,000 deposit.

They won't save that in a hurry.

Mum and Dad may have to help with cash or a guarantee.

If none is available, saving the deposit will mean a long wait before a home can be bought.

The last month has seen much debate about when interest rates will increase.

In fact rates on Australian Government 10-year bonds have already risen from around 0.7 per cent to 1.5 per cent per annum.

Investors who deal in those securities have decided they need to go up.

That's the first signal that all interest rates will rise, eventually.

The RBA says it will happen when unemployment falls below four per cent and wage rise demands increase, lifting inflation.

It expects that will be in 2024.

Interest rate rises are likely to cause financial stress for the holders of those big new mortgages.

They will also slow and possibly reverse house price gains.

However, that is two or three years away.

First home buyers and upgraders have a couple of years of likely gains ahead and should consider buying now.

Investors can also buy now with net rental yields higher than loan interest rates.

In all cases locking in a fixed low rate now for five years will be a smart move.

DO YOU WANT MORE ORANGE NEWS?

Receive our free newsletters delivered to your inbox, as well as breaking news alerts. Sign up below ...