Analysts predict that real estate prices in southeast Queensland will grow little in the coming year as home buyer confidence wanes.

CB Richard Ellis researcher Sam Reilly says there will be limited price growth in the short term since the market was still adjusting to the effects of the First Home Owner Grant. "While the extra grant was available there was a significant increase in owner-occupier activity as buyers moved out of the rental market," he said. "The increased demand was not matched by developers and a supply shortage resulted in a period of strong price appreciation."

He added: "However, the end of the boost in 2009 has seen a rapid decline in activity in the sub-US$500,000 range as the impact of rising interest rates and a falling migration rate to Queensland begins to bite."

Many believe that the Reserve Bank of Australia will maintain current interest rates for a while after the latest hike. Auctioneer Jason Andrew told The Courier-Mail that only half the auctions he held last week attracted bidder registrations; down on the highs of 80 percent over the previous two weeks. "Sixty one percent of the properties we auctioned did not attract a genuine bid," he said. "Of the properties that did sell under the hammer, all went for just over or on the vendor's reserve price and, in some cases, under expectations."

He added:"One property in particular sold for almost US$300,000 under the vendor's original reserve."