Reserve Bank research has found its cuts in official interest rates drove up house prices, and cautions that long-term falls could in the worst case escalate into an American-sized drop in Australia's property market.

As recently as last week, Reserve Bank governor Philip Lowe downplayed the role of the RBA in the spike since 2011 in house prices, which in Sydney and Melbourne climbed by up to 75 per cent, peaking in 2017.

Since then they have fallen, with Sydney's house prices dropping at their fastest rate since the 1982 recession, while they are also trending down in every capital city bar Hobart and Canberra.

Dr Lowe said while low interest rates had increased the capacity of people to borrow, population growth and the slow manner in which a supply of new properties had come on to the market were the main reasons behind the surge in prices.