The RBA governor has welcomed moderation in house prices in some of the locations where they had been rising most rapidly.
In a speech, Stevens told an annual forum organised by ASIC, that bank balance sheets had been improving in recent years.
"On the topic of loan quality, the strengthening of lending standards for housing that resulted from the actions of both APRA and ASIC was timely," he advised.
"So often over the years, tighter standards tended to come too late and reinforced a downturn after it had begun."
Mr Stevens said the restraints on lending - primarily to investors - appeared to have come before a deterioration in measures of asset quality, such a default rates.
"Some moderation in house prices in some of the locations where they had been rising most rapidly, while not the direct objective of the supervisory measures, is also, in my judgement, helpful," he said.
To read the speech in full, click here.