The Reserve Bank’s earlier and sharper-than-expected interest rate rise of 0.25 percentage points could put a squeeze on recent home owners, spook new buyers and trigger a sharper fall in prices this year, experts say.

“I think the initial shock of the first interest rate rise in more than a decade will really slow the market and put a handbrake on house prices,” Mark Bainey, chief executive of Sydney-based property developer Capio Property Group, said.