A founding member of one of Australia's biggest real estate fund managers Charter Hall's Cedric Fuchs has warned of serious vulnerabilities in the housing market with people not adequately prepared for the risks of a downturn.

The South African immigrant who helped build Charter Hall into a $21 billion fund manager said there was growing complacency in the residential property markets especially when it came to managing debt.

"I don't think a lot of people have done stress tests when they have gone to buy residential property," he told The Australian Financial Review.

Charter Hall co-founder Cedric Fuchs. "It's very much like an avalanche." Janie Barrett

"I don't think people know where these fingers of vulnerability lie. It's very much like an avalanche. Nobody knows where the voids are under the fingers of snow that can pull everything down."

Mr Fuchs, whose son David is the chief investment officer of Sir Frank Lowy's family office, is retiring from the property business he has been with for 35 years.