The ANZ chief economist Richard Yetsenga and Westpac’s Bill Evans said the cash rate would reach 4.1 per cent from the previous expectation of 3.85 per cent.

That would mean a variable mortgage rate of about 7 per cent. But the 3 per cent serviceability buffer lenders now have to consider when granting a loan, meant buyers would effectively need to be able to meet repayments at a mortgage rate of about 10 per cent.

That steep rise was expected to hit home sales and values and ANZ projected Australian home prices to fall on average by 18 per cent this year.

But Ray White economist Nerida Connisbee said house prices in Brisbane had started rising again.

“Queensland has a housing shortage that is worsening, a situation that is also increasingly the case in other states,” Conisbee said.

“A construction crisis and a fall in housing approvals is starting to show up in home completion (data). In some parts of Australia, a lack of housing is showing up in skyrocketing rents and house prices that are remaining high despite the sharp rise in interest rates.”

She said the problem of rising population and falling home construction was most pronounced in Queensland.

“Population growth in the state didn’t really slow down in the pandemic. Even though international migration was negative during this time, interstate migration ramped up,” she said.

“Even though this level of interstate migration has slowed, it has been more than matched by international migration. Queensland’s population growth accounted for more than a third of Australia’s growth in the 12 months to June 2022. At the same time, advertised rents in Queensland have increased by $80 per week over the past 12 months.”

ABS data showed that the value of housing construction work completed in 2022 fell 6 per cent in Queensland.

“The solution is to get more homes built,” Conisbee said.

It comes as senior Queensland bureaucrat and director general of State Development Mike Kaiser noted last week that developers had stopped “churning out small unit blocks”.

On LinkedIn, Kaiser said developers were not responding to the market and his department would need to find answers when the SEQ regional plan is reviewed this year.

The Housing Industry Association said the number of house constructions started in 2023 would likely fall to the lowest level since 2012 because of higher interest rates.

“There was a huge volume of work in the pipeline when rates started to rise in May 2022 and there remains a record number of homes under construction, but this will shrink quickly as market confidence continues to fade,” HIA chief economist Tim Reardon said.

The number of detached housing starts would fall below 100,000 from almost 150,000 in 2021.

“One policy tool at the disposal of government is to ease the barriers put in place in recent years that restrict first home buyers access to a mortgage, Reardon said.

“Over a decade of macro prudential restrictions have seen borrowing for those with less than a 20 per cent deposit become increasingly expensive. This inevitably leads to banks increasingly lending to those that already own a home.”

“Easing the barriers to home ownership need not undermine the efforts of the RBA or the government to reduce inflationary pressures.”

The regulator, APRA, was responsible for the 3 per cent buffer and banks and other lenders have called for its scrapping in light of the increased stress on families.