``Falling interest rates over the next 12 months may provide some assistance in pegging the gap between underlying and effective demand for housing,'' the HIA's Branch Manager Northern Tasmania Nick Proud said.

``Over the next twelve months a new interest rate cycle now looks certain to emerge and despite global uncertainties, interest rates look certain to fall.''

He said housing affordability remained far too low but interest rate cuts over the next twelve months could provide some first time opportunities for some first home buyers.

``Increases in interest rates were the final straw for many current and aspiring home buyers, rate cuts will provide some necessary relief,'' said Nick Proud.

``The roll out last week of the home super saver account which provides first home buyers with a 17 per cent federal Government contribution and a tax rate of 15 per cent on contributions, will go some way to provide housing affordability relief in what are set to be uncertain times ahead.''

In welcoming the drop in official interest rates, HIA noted that a drop in interest rates would provide a glimmer of hope for both current mortgage holders and aspiring first home buyers looking to enter the housing market.

``Notwithstanding uncertainties in the economy, further rate cuts over the next twelve months provide greater opportunities for Tasmanians to get into home ownership.

``Put simply, if you can afford to get into a home of your own don't delay,'' Nick Proud said.

A full percentage point reduction in mortgage interest rates over time means a saving of $143 per month on a $200,000 mortgage or more than $1700 a year.