The bank didn’t fiddle at the edges, either. Its two, three and five-year fixed rate home loans went up .5 per cent while its four-year loan rose .6 per cent.

Meanwhile, Westpac said it expected the Reserve Bank would hike rates by .4 per cent at the June meeting.

“We are forecasting a substantial lift in annual underlying inflation for the March quarter to 3.4 per cent and a fall in the unemployment rate from 4 per cent to 3.8 per cent in April,” Westpac’s Bill Evans said.

“On the basis of those forecasts, we expect the RBA will decide to lift the cash rate by 40 basis points (0.4 per cent) at its board meeting on June 7.

“A possibility might be for a more cautious 25 basis point lift in June to be followed by the 40 basis point move in July.

“However, we anticipate that market and media expectations will shift towards a 40 basis point move over the next six weeks and the anticipated shock to confidence will be contained.”

At the same time, the US market is now writing it hikes to its interest rates after US Federal Reserve warned of a more aggressive approach to tackling interest rates, which led to big market falls on the ASX today.

Some economists have said the RBA may move sooner and raise rates at the next board meeting in May, but the more dominant argument is for a June hike.

But even with those sorts of significant moves, economist think that the Australian housing market will only fall moderately because wages would rise and savings were high.

RateCity said the record low variable rates were about to be consigned to history, but increases in those rates may not be as severe as the fixed rate market.

“Anyone coming off a fixed rate (loan) in the next couple of months would do well to start shopping around,” RateCity’s Sally Tindall said.

However, NAB believes the Reserve Bank’s benchmark cash rate would be 1 per cent by the end of the year and 1.75 by the end of 2023. There are others who think it would be more than that.

So how much will house prices fall? In Brisbane, the NAB said the market would turn negative by the end of this year and fall by 6 per cent next year. Again, there are others who have tipped falls of 10 per cent next year.

But something to watch is input from foreign buyers. In NSW they make up one in every 10 sales. In Queensland, international buyers make up one in 20 sales, or 5 per cent, which is a significant fall from usual level of 11 per cent of sales.

Once international borders are relaxed those foreign buyers could return, adding more pressure to the market.

Significantly, rents were expected to continue to rise and outpace house price growth which could indicate higher yields for landlords.