The housing industry has warned a cut in migrant numbers could force the Reserve Bank into slicing interest rates to prop up a struggling property market that is already facing a 15 per cent drop in new home starts this year.

Releasing its latest forecasts, the Housing Industry Association on Thursday said there were already worrying signs about the fall in new construction driven by falling house prices.

Dwelling starts reached a record 233,000 in 2016, filling a void left by the end of the mining construction boom. Starts have held above 200,000 for a record five years including 2018.

But HIA chief economist Tim Reardon said there had been a sharp drop-off in starts through the later stages of last year which was continuing into 2019.