The Reserve Bank has once again warned that growing consumer spending encouraged by the housing boom might not be in the national interest.

Deputy governor Philip Lowe said that rising household debt encouraged by higher home and land values meant households were more vulnerable to external shocks.

"Given the position of household balance sheets, it is unlikely to be in our long-term interest for a consumption boom to be financed by a pick-up in household borrowing," Dr Lowe said in a speech in Perth last night.

"Ever-rising housing prices, relative to our incomes, do increase risks in the economy and are unlikely to make us better off as a nation. Rising housing prices are best matched by rising incomes.

"This is something we continue to be cognisant of in the setting of monetary policy."

Dr Lowe's warning is a sign that the Reserve Bank is reluctant to cut the cash rate below the current historic low of 2 per cent because of concerns about a potential housing price bubble in Sydney and Melbourne.

In recent public statements, the RBA has said it is working with other regulators such as the Australian Prudential Regulation Authority (APRA) to stem investment in residential housing.

APRA has leant on major banks to put more capital aside to back mortgages and banks have reacted by raising interest rates on investor and interest only loans.

In his address on national wealth and land values, Dr Lowe said that while higher values had made property owners better off the dream of buying a home was more difficult for young Australians.

"If they care about the future housing costs of their children then ... it's possible that the higher expected future housing costs could exceed the capital gain, even though they own their own property," Dr Lowe said.

"The same is obviously true for renters. They don't have any capital gain at all."

Dr Lowe said, while home prices were rising, household incomes were not keeping up and low rates were providing less of a boost to consumer spending than a decade ago.

Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.