Sydney, Australia’s largest market and its bellwether, slid 2.3%, Melbourne dropped 1.2% and Brisbane fell 1.8%, CoreLogic Inc. said in a report Thursday. They were the main drivers behind a 1.6% decline in major cities.

The national index, which includes regional markets, also dropped 1.6% in its worst monthly result since 1983.

The Reserve Bank of Australia began an earlier-than-expected tightening cycle in May and has since hiked by a total of 175 basis points to take the cash rate to 1.85%. It’s widely expected to raise again next week, with money markets implying a rate of 3.3% by December.

“It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” said Tim Lawless, research director at CoreLogic.

Hours after the release, lending data showed the value of new loan commitments for housing fell 8.5% in July, exceeding economists’ estimates for a 3.5% drop. Within that, the value of new owner-occupier loan commitments fell 7%, while new investor loan commitments tumbled by 11.2%.

Still, RBA officials have signalled confidence in mortgage holders’ ability to absorb rising borrowing costs, saying households are in a “fairly good position” to cope with them.

Lawless expects the RBA’s cash rate to rise by at least another 75 basis points from current levels while adding that more housing stock is likely to come onto the market during the spring selling season.

That will add “further downwards pressure on housing values”, he said.