Treasurer Scott Morrison says the head of the Reserve Bank was not criticising negative gearing when he spoke about the housing market overnight.

Key points: Treasurer Scott Morrison says the economy is not at risk of housing shock

On potential changes to the capital gains tax Mr Morrison criticizes Labor's 'sledgehammer' tactics

RBA Governor Philip Lowe said there was an unhealthy investor appetite for interest-only home loans

Reserve Bank Governor Philip Lowe said there was an unhealthy investor appetite for interest-only home loans in Australia, adding that "tax arrangements" for property investors had also contributed to high house prices in Sydney and Melbourne.

It is the first time the Reserve Bank has directly linked tax to the "unusual" popularity of interest-only loans in Australia. Mr Lowe also said that the ongoing increase in debt and rising housing prices were a risk to the economy.

But Mr Morrison brushed off questions about tax, instead saying that Mr Lowe was right to warn about interest-only loans.

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He told the ABC that Australia's economy was not at risk of housing shock.

"I don't think we're at risk of that, but what could produce those sorts of results are the sort of sledgehammer policies that the Labor Party have been proposing, particularly on abolishing negative gearing," he said.

"If you take a sledgehammer to the property market, then you are in real serious risk of a self-fulfilling prophecy on issues around the housing market."

But the Opposition says Mr Lowe's comments prove negative gearing should be curbed.

Shadow Treasurer Chris Bowen described the comments as a "strong intervention".

"Supply is a very important part of the equation but while you've got these tax distortions and the most generous property tax concessions in the world, you're going to find investors taking up more and more of the supply," he said.

"That's been borne out in every release of data we see."

Figures from the Australian Bureau of Statistics outlines an increase in the number of negatively geared properties in Australia.

In 1995 to 96, 1.1 million Australians declared net rental income on their tax returns.

Of these, 68 per cent claimed rental interest deductions and more than half had a taxable loss after interest and other deductions — that is, they had negatively geared rental properties.

Ten years later, 1.6 million individuals declared net rental income on their tax returns, with 67 per cent listed negatively geared rental properties.

The ABS stated that gross rental income reported for tax purposes increased six-fold to just over $19 billion during the decade, but noted that some of the increase could be explained by higher interest rates.

Mr Lowe also criticised banks overnight for signing people up for loans that they should not have, but Mr Morrison said "just because you can borrow, it doesn't mean you should".

"Sometimes when people look at what the banks say they will loan to them, they seem to think that that is somehow a green light and it's an assurance that they will be able to repay this," he said.

"Individuals always have to make the ultimate choice about these things and I think the actions taken by the banking regulator most recently - and prior to that as well - has tightened up these conditions."

Chainsaws, scalpels and sledgehammers

The Treasurer was also tight-lipped when asked about potential housing affordability measures in next month's budget.

When asked twice on potential changes to the capital gains tax — a measure which sees around half the profits from the sale of an investment property go untaxed — Mr Morrison did not rule anything out.

He instead said the Government should be wary of broad taxation measures.

"The key judgement that has to be made is, in any of these areas, that you don't do harm," he said.

"… Labor say they want a chainsaw and we think you should use a scalpel."

Prime Minister Malcolm Turnbull was also repeatedly asked on potential changes to property tax concessions, but would not be drawn.

Mr Turnbull told reporters that supply remained the "key" to housing affordability, but further details on the issue would be in the budget.

The Government has also refused to rule out allowing first home buyers to access their superannuation before retirement to pay for a deposit, despite previous criticism from Mr Turnbull and Finance Minister Mathias Cormann.

An analysis of housing and superannuation data found the average superannuation balance for young people fell below the median 20 per cent deposit for their state's capital city.

The median house deposit for the Greater Sydney area does not fall below the average household superannuation balance until people reach the 45-49 age bracket.