With the supply of homes unable to jump up to meet increased demand when rates fall, the construction shortfall will make life more difficult for renters, Mr Lamont said.

Home-loan approvals dropped more than expected in June, pinched by the RBA's and bank's high interest rates.

The number of home loans, seasonally adjusted, dropped 3.7pc in June from the previous month's numbers, according to the Australian Bureau of Statistics.

The language, echoing the words used at the time of the August rate decision, depicts the economy as slowing rapidly, in part, because of forces outside RBA governor Glenn Stevens' influence.

Rate changes are the RBA's tool for influencing the pace of economic activity.

In the past five years, amid the nation's commodities export boom, the central bank has raised rates to the 12-year high of 7.25pc to prevent rising spending from triggering a recession.

Mr Stevens' efforts of halt excess consumer spending have been helped by a temporary spike in the price of oil, which shot up to $US146 per barrel in early July, and took a big chunk out of consumers' wallets, although the minutes note oil prices have eased considerable since then.

Commercial banks, such as Westpac and ANZ, have used the higher official interest rates as an opportunity to pad their own lending rates since the beginning of the year.

The average mortgage from a major bank now costs 9.6pc.

For homeowners, those added costs soak up money that would be spent on other items such as clothes and electronics.

Sales of those items have been flat or weaker in recent months.

In its minutes, the RBA noted consumer spending "had weakened considerably in 2008"....much stronger language than the view it "was slowing" in its July meeting minutes.