ANZ, which in April created confusion by raising its expectations for housing prices two weeks after an earlier prediction, said on Wednesday it would cut its outlook due to a sharply deteriorating market.

The country's third-largest mortgage lender did, however, not forecast any new numbers, saying it would only do so in a week or so, with its next quarterly update.

A sharp deterioration in auction clearance rates and possible further tightness in credit policies due to the royal commission into banking made ANZ decide to alert the market to its changing view, senior economist Daniel Gradwell said.

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"We thought it was important to acknowledge that our existing view is under a lot of pressure at the moment," Mr Gradwell said.

"If we think two to three months ago, auction results had stabilised and were possibly heading higher. In February, clearance rates were 66 per cent nationwide. That's fallen down well under 60 per cent."