Just last night newly-installed RBA Governor Phillip Lowe all but ruled out any further interest rate cuts unless inflation falls markedly below its current level around 1.5%.

At a televised after dinner question-and-answer session in Melbourne the governor acknowledged that inflation was below the RBA’s targeted 2-3% range, but unambiguously dismissed the idea that this justified the need for another rate cut given the multiple problems associated with overly-loose monetary policy.

The chances of inflation falling further look slim-to-zero given that the commodity price cycle has bottomed and the Australian economy is now benefitting from a lower dollar. This alongside the RBA governor’s candid disclosures mean the next move in cash rates is higher unless exceptional circumstances arise, with parts of Australia’s housing market looking vulnerable to a big correction.

Lower rates over the last few years have fuelled increased borrowing and overseas buying (via a lower AUD) to power eastern seaboard property prices higher, although property prices now look set to slide downhill over the years ahead.

News reports suggest that lenders are already starting to hike fixed and variable home loan rates with markets also now adjusting their expectations as to the future direction of rates.

Nothing will put a hole in house prices faster than higher borrowing costs and the spring of 2016 looks the summit for ballooning Australian house prices, although I don’t expect a huge correction lower unless credit conditions tighten faster than expected.

Still falling property prices are bad news for the likes of home loan specialists Yellow Brick Road Holdings Ltd (ASX: YBR) and Mortgage Choice Limited (ASX: MOC).

While the retailers that rely on strong property markets and the household or placebo wealth effects like Harvey Norman Holdings Ltd (ASX: HVN) or Nick Scali Limited (ASX: NCK) may also be in for a skinny few years.

Sydney-focused estate agent Mcgrath Ltd (ASX: MEA) may also struggle to generate top line growth unless it can win market share, while the big home loan lenders like the National Autralia Bank Ltd (ASX: NAB) or Commonwealth Bank of Australia (ASX: CBA) may enjoy higher net interest margins as they lend long and borrow short in managing the home loans and interest rate risks on their balance sheets.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.