Low interest rates increase housing wealth inequality, research by the Reserve Bank has found, as governor Philip Lowe signals interest rates could remain low for decades.

Using three decades of house price data between 1990 and 2019, the research found housing prices in more expensive areas are more sensitive to changes in interest rates than in cheaper areas.

Lower interest rates have an impact on wealth inequality. Credit:Morgan Hancock

The research, released by the central bank on Monday, said housing prices are more sensitive to monetary policy in regions with higher shares of housing investors and higher levels of income, because they are more easily able to borrow when interest rates are low.

"This suggests that lower interest rates increase housing wealth inequality, while higher rates do the opposite," the research said.