ASIC chairman Greg Medcraft has sent a warning to investors about buying property in Sydney and Melbourne, saying he fears both cities may already be in a housing bubble.

In an interview with The Australian Financial Review, Mr Medcraft says the RBA's decision to cut rates to a historic low of 2 per cent has spurred investors' appetite, but he fears a correction will leave them exposed, with self-managed super funds particularly at risk.

"There is always danger when rates get so low.": ASIC Chairman Greg Medcraft. Credit:Chris Pearce

"History shows that people don't know when they are in a bubble until it's over," Mr Medcraft said.

"I am quite worried about the Sydney and Melbourne property markets. In housing, the long-term average income to average price ratio is four to five times, but at the moment it is at historic highs," he said.