The Reserve Bank of Australia has warned of rising risk building in the housing market, especially in the rapidly inflating cities of Sydney and Melbourne.

"Risks to household balance sheets and housing markets more generally have increased. In Sydney and Melbourne, housing prices are rising at a rapid pace and auction clearance rates are at high levels," the RBA said in its semi-annual Financial Stability Review.

"At the same time, there continue to be concerns about an oversupply of apartments in pockets of Melbourne and in parts of Brisbane, where apartment prices have declined in recent months, rental growth has been soft and the vacancy rate has trended higher.

Risk is building in the housing market, according to the Reserve Bank. Sarah Keayes

"In Western Australia and other regions with large exposures to the mining sector, overall housing market conditions remain weak."

With the Reserve Bank reluctant to lift interest rates because of a weak wider economy, the statements about rising risk in the housing market will be seen by many as its attempt to talk down - or jawbone - the rampant housing market (along with the recent macro-prudential measures announced by APRA), which has yet to show any signs of slowing down.