a worker stands on scaffolding at a construction site for a new residential complex in sydney australia february 20 2018 picture taken february 20 2018 picture taken february 20 2018 reutersdavid gray sydney sept 19 reuters  australians looking to buy a new home could actually benefit from rising interest rates as they lower the price of housing enough to ultimately result in lower mortgage payments than they would otherwise face a top central banker said on monday speaking at a housing conference reserve bank of australia rba assistant governor jonathan kearns said the 225 basis points of rate hikes already delivered could lower prices by at least 15 percent over a twoyear period while also cutting borrowers maximum loan size by around 20 percent estimates suggest the net effect is that mortgage payments for new buyers would be higher for about two years as a result of higher interest rates said kearns but after that the declines in housing prices and mortgage size begin to dominate he added it suggests that because higher interest rates reduce housing prices and so mortgage sizes mortgage payments for new borrowers could ultimately be lower than if interest rates had not increased the central bank has faced much criticism for lifting rates for five months in a row to 235 having last year forecast that rates were unlikely to rise until 2024 the housing market has cooled rapidly as a result with data from property consultant corelogic showing prices nationally sank 16 in july from june that was the largest monthly drop since 1983 and dragged annual price growth down to 47 compared to a peak above 21 late last year kearns also noted that around 35 percent of housing credit is fixedrate debt and these borrowers would not face an increase in their interest expenses and loan payments until that fixed rate expired likely from next year on kearns emphasised that there were many factors other than interest rates that affected house prices including income growth migration and building costs so overall we know that higher interest rates will tend to depress residential and commercial property prices but there is considerable uncertainty about the magnitude and even the timing said kearns