Houses to be hit harder than flats by price falls, RBA says

RBA’s Jonathan Kearns says higher interest rates will have biggest impacts on prices where ‘housing supply is less flexible, mortgage debt is higher, there are more investors and incomes are higher’. Photograph: Paul Miller/AAP

Houses, particularly those at the luxury end of the market, are likely to be hit harder by falling property prices than flats or apartments, the head of domestic markets for the Reserve Bank of Australia, Jonathan Kearns, has said.

In a speech on Monday, Kearns also said the RBA’s rapid increase in its key interest rate would “tend to depress residential and commercial property prices” but the wider risks for financial stability “appear to be contained”.