But the bank also said the market had already started tightening up because fixed rates had been rising for several months and they represented about half the market now.

“It’s true that variable rates have been edging lower over recent weeks, but the lowest mortgage rate available to new borrowers is set to lift around 50 basis points over coming months which will have implications for borrowing capacity and hence house prices,” ANZ senior economist Felicity Emmet said.

“This will be a headwind for house prices or, at the very least, remove some of the tail wind from lower rates.”

Ironically, the claims from the bank’s economics team came as the bank actually lowered in variable rate.

The housing boom has led to an median increase in prices of 20 per cent this year and there have been expectations that prices in Brisbane would rise another 10 per cent next year.

CoreLogic released a report today showing the monthly growth rate in house prices in Brisbane was re-accelerating. Property values jumped 2.5 per cent in October _ the highest monthly increase in the current upswing and the highest since 2003.

CoreLogic said the Brisbane housing market had seen some extraordinary tailwinds through COVID-19, helped along by strong interstate migration and low exposure to the virus.

“Years of relatively subdued growth rates have made typical dwelling values across the city appear affordable, a t least relative to Melbourne and Sydney,” the company said.

Adding to the frenzy had been a massive increase in savings which had been forced on people because of travel and spending restrictions during the pandemic.

Traditionally, banks had waited for the Reserve Bank to increase its cash rate before they added to the variable rate, but in recent years that has disappeared and banks have increased rates to cover their own borrowing costs well before the RBA made any decision.

“Our view is that this headwind will be enough to slow house price gains, rather than turn prices negative,” Emmet said.

“A rise in fixed mortgages matters more this cycle. Fixed rates have been tracking sharply below variable rates through the pandemic, prompting a significant shift in their take-up. Nearly half of new borrowers now choose fixed mortgages, compared with around 15 per cent prior to the pandemic.

“The rise in fixed rates represents a tightening of financial conditions and it will work like an effective tightening of monetary policy.

“Lower borrowing capacity and a slower pace of house price gains is likely to feed to lower credit growth.”

ANZ said that if this increase was to occur it may mean that regulators would not have to step in to curb lending.

The bank regulator, the Australian Prudential Regulation Authority, has already taken such a step when it told banks recently to lift their guidance on loan serviceability from 2.5 per cent to 3 per cent, which effectively meant that banks had to consider whether a borrower could cope with a higher interest rate.

Analysis from RateCity.com.au showed that for a family of four with an annual household income of $150,000, the maximum home loan borrowing power could decrease by an estimated $46,900.

ANZ said the increase in rates would mean the RBA was more likely to sit on its hands.

“All else being equal, this should push out the timing or reduce the number of hikes that the RBA eventually needs to deliver,” Emmet said.

“We expect that the RBA will being lifting the cash rate in the first half of 2023.”