Australian household debt has hit a record 177 per cent of annual disposable income while housing valuations are "flashing red", according to Barclay's chief economist, Kieran Davies.

"House prices now equate to 4.3 times annual income and 28 times annual rent, both within a fraction of their historic highs," Mr Davies said.

Sky is not the limit: Barclays chief economist Kieran Davies has concerns about Australia's housing market. Credit:Nic Walker

The respected former treasury economist believes the RBA is "worried about the strength of the housing market, where the evolution from recovery to boom has brought jawboning by the governor into play."