One of Australia's significant second-tier lenders is suspending new property investor loan approvals until later this year to comply with the bank regulator's limits.

AMP Bank released a statement today saying it would not be accepting new, or assessing existing, property investor loan applications from today.

The banking division of the wealth management giant said the suspension of new investment lending is expected to last until later this year.

Existing property investment borrowers with AMP are also being slugged with a 0.47 percentage point increase in interest rates, about 20 basis points more than increases announced by three of the major banks last week.

The latest Australian Prudential Regulation Authority (APRA) banking statistics for May 2015 show that AMP had grown lending to property investors by 13.1 per cent over the year to $2.92 billion, above the regulator's 10 per cent speed limit.

"Australia's property market is experiencing high levels of investor property lending growth and we are supportive of the regulator's intention to slow this growth to appropriate levels," said AMP Bank's managing director Michael Lawrence in a statement.

Sorry, this audio has expired Bank analyst Brian Johnson says major banks will lift rates further

That growth rate is above all the major banks except for National Australia Bank, which grew property investment loans by 14 per cent.

Macquarie Bank reported a massive 86.7 per cent annual increase in investor loans to $8.8 billion, but CLSA banking analyst Brian Johnson told ABC News Online that figure was inflated and not directly comparable with AMP's figure.

"Macquarie Bank has been actually buying home loan portfolios that have been originated by other organisations," he explained.

Tougher rules should cap housing bubble: bank analyst

Over the past few months, banks and other financial institutions have started imposing tougher income tests and interest rate buffers on property investors, with many also increasing the amount of deposit that buyers must put up.

Those moves have accelerated over the past fortnight after APRA announced that it would require the big four and Macquarie to hold more reserves to offset potential losses on their mortgages.

That was the latest in a series of moves to force the large banks to comply with a speed limit of 10 per cent annual growth in property investor lending imposed by APRA in December.

That prompted ANZ and CBA to lift their interest rates for variable investor loans by 27 basis points, while NAB increased rates on interest-only loans (mostly held by property investors) by 29 basis points.

Brian Johnson said the regulatory changes meant that property investors would be able to borrow less and do so at a higher cost, evening up the playing field with other buyers.

"Presumably they won't be able to compete as aggressively with, for example, owner-occupiers, so that's got a nice policy outcome," he said.

"But I would flag to you, 'borrow less, cost more' equals perhaps not quite willing to actually pay up for house prices like we've seen to date."

Mr Johnson said the big four banks also appeared to have the pricing power to be able to pass on increased costs associated with tougher regulation and higher capital requirements.

However, he said that did not mean most borrowers would be paying more, because the Reserve Bank targeted actual interest rates when setting the cash rate.

"You'll see probably more interest rate cuts, they won't necessarily flow through on household borrowing rates, and you get a rather nice policy outcome where we have lower rates for businesses, we have a lower Australian dollar which is good for businesses, but the housing bubble probably doesn't get any bigger," Mr Johnson forecast.

Real estate boom soon to peak: property analyst

A leading property analyst agrees that Australia's latest home price boom, focused on Sydney and Melbourne, is nearing its peak as these investor loan limits start to bite.

A leading property analyst from SQM Research, Louis Christopher, said the most recent auction clearance rates had edged back just below 80 per cent in the leading boom market of Sydney.

"Trusted sources on the ground including agents and mortgage brokers in Sydney are informing me of would-be buyers now holding back," Mr Christopher observed in his latest note on the real estate market.

Mr Christopher said the changes "will knock out most of the weaker borrowers", which is what they are designed to do, but the rate rises by the banks may see other investors also choose not to buy, or even to start selling some of what they own.

"SQM expects total residential property listings have surged in July, though the final result will not be known until early August," he added.

"The problem is, property investors can be a fickle bunch. A number of them are momentum driven - buy when the market is moving higher and sell when the market is heading lower."

Despite Mr Christopher's belief that the Sydney market is well overvalued, he does not see the catalyst for large price falls caused by the regulatory action and response from the banks.

He said it would take a much more substantial interest rate rise to really crunch the market.

"I believe rates would need to go up by at least 1.5 per cent and at a time when there is some type of massive supply overhang on new stock. Neither seems likely at this point in time," Mr Christopher concluded.

The major banks announcing investor loan rate increases have partially offset that with cuts to fixed interest rates for owner-occupiers.

However, bank analysts at Morgan Stanley said in recent research that the majors were likely to add 10 basis points to their full portfolio of variable interest rate loans to help prop up their earnings amid higher capital requirements.

The analysts warned that owner-occupier borrowers may not see the full benefit of any subsequent Reserve Bank rate cuts, just as CBA, Westpac and NAB customers missed out on the full 25-basis-point official rate cut in May.

"We believe that another RBA rate cut could provide the opportunity for the majors to re-price," they observed.