HIA's Harley Dale says strong growth only in Sydney

The Housing Industry Association chief economist Harley Dale says strong price growth was only evident in Sydney.

"Any corrective action by regulators must be very targeted, so as not to adversely affect broader housing demand," Harley Dale suggested.

"Residential building is one of the few bright lights in the economy at the moment, and it would be unwise to interfere in the market to an extent that risks derailing activity."

Efforts to boost lending standards in Australian banks' housing portfolios in the last three months were starting to bear fruit, Wayne Byres, the chairman of the Australian Prudential Regulation Authority (APRA).

"This effort has consumed a great deal of our supervisory time over the past three months, but is now starting to bear fruit," Wayne Byres told a senate committee hearing this week.