sydneythe prospect of sharply rising interest rates in australia wont put a brake on the countrys housingconstruction boom immediately according to home builders the housing industry association an umbrella group for homeconstruction companies said tuesday that building activity is supported by a solid pipeline of work and will extend at least until mid2023 there were 757 more detached homes under construction at the end of 2021 than the precovid period and there are also more homes approved and waiting for commencement than in any previous cycle hia chief economist tim reardon said rising interest rates can cause building commencements to slow within six months but in this cycle the lag will be significantly longer mr reardon added the reserve bank of australia raised interest rates for the first time since 2010 at the start of may and signaled its intent to continue hiking rates for a while yet moneymarket traders think the rba could tighten very aggressively before the end of the year to tame the biggest surge in inflation in 20 years still economists at major banks expect a somewhat gentler tightening cycle arguing that high household debt and falling real wages mean that higher interest rates cool off the economy fairly quickly soaring housingconstruction costs have added significantly to australias inflation problem but they are unlikely to ease soon mr reardon said the australian bureau of statistics estimates that the cost of homebuilding materials not including the cost of labor increased 154 in the year to march on the ground the cost increases are higher still this is the fastest annual increase in the official estimate of homebuilding materials since 1980 and they are still rising he added this will delay the adverse impact of rising rates on the industry and therefore the wider economy mr reardon said