Westpac says the high-rise apartment market may pose risks to the Australian economy, pointing to a change in bank lending policy to foreigners who make up a bulk of those buying, and falling market prices that may impact demand.

According to the Australian Bureau of Statistics, to March there were 110,000 high-rise apartments under construction, a jump of 42 per cent from the prior year's 77,000 under construction.

Westpac said there were risks in the prospects of a continued boom, including a change in policy by the banks not to finance foreigners, who require approval from the Foreign Investment Review Board (FIRB) with mortgages.

The major banks control over 90 per cent of total home lending.

"The importance of this policy change by the banks for the overall market will depend on the proportion of sales going to FIRB buyers as well as the proportion of buyers who require finance versus those who have access to cash," wrote Westpac chief economist Bill Evans.

Westpac pointed to reports that indicated a "surprisingly high proportion of FIRB buyers need recourse to finance".

Even those with access to cash may find difficulty, as authorities in China have tightened restrictions on capital flows out of the country.

China's foreign exchange reserves have stabilised to around $3.2 trillion, having peaked at $4 trillion a year ago.

Another risk are reports of falling market prices in inner-city markets, which Westpac said was potentially discouraging future purchasers.

"We have already seen evidence of falling prices in some inner-city developments, but overall price appreciation in the detached housing markets has only been affected at the margin," Mr Evans wrote in the report.

"No-one, including the Reserve Bank, knows the extent to which these markets will slow, and therefore whether the sector represents a significant threat to economic activity."

Westpac said a consistent aspect of the RBA's statements in August and October was the "considerable supply of apartments scheduled to come on stream over the next couple of years".

The RBA kept interest rates on hold at a historic low of 1.5 per cent earlier this month.

In a state-by-state breakdown, apartments under construction include 44,000 in New South Wales, 34,000 in Victoria, 23,000 in Queensland and 4,000 in Western Australia. High-rise buildings are defined as those above four floors.

Recent research by investment bank UBS found foreign banks are stepping in with lending as Australian banks tighten underwriting to high rise apartments.