PHOTO: Sydney

(Bloomberg) — Australian monetary policy adjustments have the greatest impact on expensive property markets, a Reserve Bank research paper showed, and low interest rates can temporarily exacerbate housing wealth inequality.

“Prices are typically more sensitive to changes in interest rates in areas where land is more expensive,” RBA economists Calvin He and Gianni La Cava said in the paper Monday. “Specifically, we find the sensitivity is greater in areas where incomes are relatively high, households are more indebted and there are more investors.”

Australia’s central bank cuts its cash rate three times last year to a record-low 0.75% as it sought to spur economic growth and hiring. That helped reignite property prices, with Sydney and Melbourne leading the way, and climbing 1.1% and 1.2%, respectively, in the month of January.

The RBA paper found that housing prices respond differently to monetary policy depending on local housing supply conditions, investor concentration and average income and mortgage debt.