House prices across Australia are expected to start falling with the two biggest banks hiking their mortgage rates multiple times in just weeks - with the others to follow. Sydney's median house price has surged by 30.4 per cent during the past year to a very unaffordable $1.334million. The national increase of 21.6 per cent in October, for both houses and apartments, was the fastest annual pace since early 1989, CoreLogic data showed. Westpac, Australia's second biggest bank, is now expecting property prices to surge in 2021 before slowing next year and falling in 2023. This is set to occur as the big banks keep hiking their mortgage rates while inflationary pressures increasingly worry the Reserve Bank of Australia. House prices across Australia are expected to start falling with the two biggest banks hiking their mortgage rates multiple times in just weeks (pictured is an auction at Hurlstone Park in Sydney's inner west in May before the lockdowns) The typical national property price of $686,339 is now so expensive an average, full-time worker on $90,329 a year would owe six times their salary, even with a 20 per cent mortgage deposit factored in. Commonwealth Bank raises fixed rates ONE YEAR: Up 0.35 percentage points to 2.34 per cent TWO YEAR: Up 0.25 percentage points to 2.34 per cent THREE YEAR: Up 0.4 percentage points to 2.69 per cent FOUR YEAR: Up 0.5 percentage points to 2.89 per cent FIVE YEAR: Up 0.1 percentage points to 3.09 per cent Source: RateCity Advertisement That means a typical professional would already struggle to pay off a $550,000 loan without being in mortgage stress where they can't pay their bills. The Australian Prudential Regulation Authority considers a debt-to-income ratio of six or more to be risky. The Commonwealth Bank, Australia's biggest home lender, on Friday joined Westpac in raising its fixed mortgage rates, inflicting more pain on heavily indebted borrowers for the second time in just three weeks. RateCity estimated the latest 0.5 percentage point increase to four-year fixed rates, taking them to 2.89 per cent, would add $131 to monthly mortgage repayments for a $500,000 loan, compared with the old fixed rate. The 0.4 percentage point increase to three-year fixed rates, to 2.69 per cent, would add $104 a month to mortgage servicing costs. A Commonwealth Bank borrower who didn't fix their rate before the increase would be paying an extra $5,503 in repayments over the fixed-rate term unless they were prepared to pay a $375 break lock fee. Borrowers are put on to a standard variable loan unless they sign up to a new fixed rate. RateCity research director Sally Tindall said ANZ and National Australia Bank were expected to also raise their fixed rates 'in a matter of days' after the Reserve Bank this week declared it was more concerned about inflation. The Commonwealth Bank, Australia's biggest home lender, on Friday joined Westpac in raising its fixed mortgage rates, inflicting more pain on heavily indebted borrowers for the second time in just three weeks (pictured are houses under construction at Schofields in Sydney's north-west) 'The speed at which global economies are improving has seen the cost of buying funds spike, putting pressure on banks to lift fixed rates,' she said. Westpac raises fixed rate mortgages THREE YEAR: Up 0.21 percentage points to 2.29 per cent FOUR YEAR: Up 0.1 percentage points to 2.69 per cent FIVE YEAR: Up 0.1 percentage points to 2.99 per cent Advertisement 'CBA has abandoned its efforts to keep at least one fixed rate under two per cent. 'While a rate starting with a "one" is a great marketing tool, it was clearly unsustainable for the bank. 'Despite yesterday’s hikes, Westpac still has two fixed rates under two per cent, however, in this climate, it’s hard to see these rates sticking around for much longer.' Westpac on Thursday hiked its fixed rates, raising three-year mortgages terms by 0.21 percentage points to 2.29 per cent. Four-year fixed rates increased by 0.1 percentage points to 2.69 per cent and five-year fixed rates went up by 0.1 percentage points to 2.99 per cent. Reserve Bank Governor Philip Lowe on Tuesday hinted the cash rate, now at a record low of 0.1 per cent, could be raised in 2023 instead of 2024. The RBA's statement on monetary policy, released on Friday, contained updated forecasts on inflation. It is now expecting underlying inflation, without volatile items like petrol, to grow by 2.25 per cent by June 2022. Westpac, Australia's second biggest bank, is now expecting property prices to surge in 2021 before slowing next year and falling in 2023 As recently as August, it was expecting core inflation to grow by just 1.5 per cent by the middle of next year. Inflation more firmly within the RBA's two to three per cent target increases the chance of an early rate rise. High borrowing costs as Australia emerges from Covid restrictions also means a slowdown in property price growth. Westpac expected Sydney property prices to rise to by 27 per cent in 2021 before dramatically slowing a 6 per cent in 2022, followed by a 6 per cent drop in 2023. It forecast Melbourne real estate values increasing by 18 per cent in 2021 before slowing to 8 per cent in 2022 and falling by 6 per cent in 2023. RateCity research director Sally Tindall said ANZ and National Australia Bank were expected to also raise their fixed rates in coming days after the Reserve Bank this week declared it was more concerned about inflation Australia wide, property prices were expected to climb by 22 per cent in 2021 before slowing to 8 per cent in 2022 and falling by 5 per cent in 2023. A stronger economy usually coincides with inflationary pressures and therefore rising interest rates. The Reserve Bank is now expecting unemployment will fall from 4.6 per cent, as of September, to 4 per cent by June 2023 for the first time since August 2008. Australian wages grew by just 1.7 per cent during the last financial year but the RBA is now expecting pay levels to increase by the long-term average of 3 per cent by the end of 2023 for the first time in a decade. CommSec chief economist Craig James said a faster vaccination pace had created a new problem - inflation. 'Given the fast vaccination take-up rates across Australia and reopening of the south-east of the country, the RBA has upwardly-revised economic growth and inflation forecasts and downwardly-revised the jobless rate expectations,' he said. All rights reserved for this news site (dailymail) and under his responsibility