Faced with the combination of rising interest rates and soaring house prices, the Government yesterday rushed out plans for new first-home buyer savings accounts to ease what Wayne Swan described as the"affordability crisis".

The average price for an established home jumped 12.3 per cent nationwide last year, with the Brisbane market scoring the biggest increase of 21.6 per cent and Adelaide a rise of 20.2 per cent.

And housing analysts do not expect today's likely rate increase from the Reserve Bank to 7 per cent to slow the price gains, which are now being fuelled by investors fleeing the tumbling share market.

Releasing details of the new first home savings accounts, the Treasurer said the lack of affordable housing was causing widespread stress.

"There are a lot of people out there that are doing it very tough and we understand that," Mr Swan said.

"When you have six interest rate rises in three years and 10 rises in the cycle, there are a lot ofpeople in mortgage stress."

The new accounts -- an election promise -- are designed to extend tax benefits similar to superannuation savings to people trying to raise the deposit for their first home.

The government will refund all but 15 per cent of the tax paid on income that is deposited in the accounts. The earnings in the accounts will be taxed at only 15 per cent.

The accounts need to be held for a minimum of four years. The tax refund will apply to contributions of up to $5000, with the low rate of earnings tax applying to contributions of up to $10,000 a year.

For people earning less than $80,000 a year, the tax refund is worth a maximum of $750 a year, while someone earning up to $180,000 would get a maximum benefit of $1250 a year.

"This is historic because what we are doing for the first time is putting in place a savings measure which is providing super-style tax concessions for people who have not retired," Mr Swan said.

But the cost of both owner-occupier and rental housing is expected to continue rising, with speculation the Reserve Bank may follow up an interest rate increase today of 25 basis points with a lift next month.

The monthly measure of inflation compiled by the Melbourne Institute and broking firm TD Securities yesterday showed prices rose by 4 per cent in the year to January, based on the RBA's preferred measure.

This is well above the RBA's comfort zone of 2-3 per cent.

John Lindeman, an analyst with the property consultancy Residex, said rising interest rates were not affecting property investors, who simply passed the cost on to tenants.

In the past three months, the biggest house price increase has been in Adelaide, where a 6 per cent jump in prices has raised the annual total to 20.2 per cent.

Mr Lindeman said investors were diverting their attention from Perth, which has become too expensive, to Adelaide, still the cheapest mainland capital city.

Perth prices have stabilised, rising only 1.1 per cent in the past year.

The Melbourne property market remains hot, with prices up 18.1per cent in the past year, while Sydney is recovering from its slowdown, its prices up 8 per cent.

Mr Lindeman said inner suburban prices in the capital cities were rising much faster, while there was no movement at all in prices in the outer suburbs, where the affordability for first-home buyers and those on lower incomes was most acute.