One of the country's most senior bankers has raised concerns about an "irrational obsession" with property investment, calling for a frank debate about tax distortions that pump up house prices.

The chief executive of ANZ Bank's Australian arm Phil Chronican also said he could understand why the Reserve Bank was looking at imposing restrictions on lending to property investors.

Phil Chronican, chief executive of ANZ Bank's Australian arm. Credit:AFR

With record low interest rates fuelling a powerful property boom in Sydney in particular, regulators were concerned some investor borrowers might be overstretching themselves as they bet on price rises.

The federal government's financial system inquiry, reporting to Treasurer Joe Hockey this month, had also said the surge in home loan debt in recent decades posed a potential "systemic risk" to the economy.