Australia's consumer sentiments were down on the back of the latest interest rates hike introduced by the Reserve Bank of Australia a week ago.

Figures released by Westpac for May confirmed that consumer sentiment index fell down by 7 percent, second consecutive fall in a month. There is also fear that strength of the Australian economy cannot be sustained in the near future.

The survey also showed that Australian think of the proposed Labor budget as dull and said it would not help increase their household income.

At least 51 percent of Australians think the budget will not affect their finances while 27 percent said they would suffer from the government's changes on the childcare rebate and tobacco excise increase. The remaining 11 percent said the budget would help rise their income levels.

Chief economist Bill Evans of Westpac said there might be a spending slow down because of the 4.5 percent increase on interest rates and 7.51 percent for mortgage lending rates.

"We are clearly back in the range for the variable mortgage rate where future rate hikes are going to hurt consumers," Mr Evans said.

"Interest rates are now starting to bite."

Matthew Quinn, Stockland's chief executive, quips that interest rates would hit households and it could deject national property prices.

"I don't think we've yet seen the rate rise that's tipped the residential market over the edge, but it doesn't feel it's too far away," Mr. Quinn said.

Sentiments on interest rates came as the Australian market weathered the second horror trading session for three days.

At least $24 billion were lost from value of local shares. The losses were due to international investors selling its mining stocks on concerns over the proposed 40 percent resource super-profit tax.

Foretescue Metals confirmed yesterday it would cancel two projects worth $US15 billion or $A17.6 billion.