The OECD has warned of a "rout" in Australian house prices, leading to a new economic downturn, saying both prices and household debt have reached "unprecedented highs".

The warning is in an otherwise positive biennial assessment released overnight that broadly mirrors the Australian Treasury's.

The survey says in real terms house prices have climbed to 250 per cent their level in the 1990s, with much of the increase taking place in the past few years, "straining affordability, especially for first-time buyers in Sydney".

"A continued rise of the market, fuelled by both investor and owner-occupier demand, may end in a significant downward correction that spreads to the rest of the economy," it warns.