Two of the country's most senior bankers have acknowledged the risk of the housing market overheating in an environment of strong demand and record-low interest rates.

As the property recovery gathers pace, Commonwealth Bank boss Ian Narev and ANZ chairman John Morschel on Wednesday hosed down concerns Australia was in a bubble, arguing banks continued to behave prudently.

Bubble in hand: CBA chief Ian Narev says prudence will pay. Credit:Josh Robenstone

But they also signalled they were aware of the risks that rapid price growth could become dangerous if it continued for an extended period.

Mr Narev said fears about the housing market overheating were justified, but he was not yet concerned about a bubble forming.