The Reserve Bank of Australia’s Melbourne Cup Day rate rise “killed” demand for new homes that had been recovering and lifting sales in the first four months of the financial year, says AV Jennings chief executive Philip Kearns.

The four-month break in interest rate rises before November’s 25 basis point increase had created confidence among the developer’s mum-and-dad buyers that the cycle of tightening was over and they could be confident about committing to new purchases, Mr Kearns said.