The number of mortgages in January was 40 percent lower that the average monthly figures recorded last year making it the lowest recorded so far since the AFG Mortgage Index started in 2004.

The country's largest mortgage broker, AFG, has 10 percent of the total mortgage market nationally and its figures are indicative of ABS statistics.

Queensland was the worst hit state, with only around half the number of mortgages that were processed in December. But other states were very badly affected, with month on month sales down by 39.6 percent in Victoria, 33.6 percent in South Australia, 31.8 percent in New South Wales and 28.6 percent in Western Australia.

AFG Executive Director, Kevin Matthews, says: "The flooding in Queensland is a human tragedy of major proportions. As we may have expected, the floods have dealt a significant blow to the local property market. But the disaster has affected sentiment across the whole country. In times of national crisis, people hunker down and put off major buying decisions."

Consumer confidence is also adversely affected by the huge discrepancies between industry experts on where property markets are heading. Some industry experts will say that the market is overpriced while others claim that it has hit rock bottom.

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