Reserve Bank governor Glenn Stevens is concerned about Sydney's booming house prices, describing the market as "crazy".
Mr Stevens says he finds the steep rises in property prices in Australia's biggest city "acutely concerning" and that the issue is a social problem.
"Yes, I am concerned about Sydney. I think some of what's happening is crazy," he told a business lunch on Wednesday.
His comments came as HSBC research found Australian home prices have risen 24 per cent in the past three years, though the gains have mostly been confined to Sydney and Melbourne.
Sydney prices had jumped 39 per cent, while Melbourne prices were up 22 per cent while the average price for the rest of the country was 10 per cent.
Mr Stevens said Sydney's housing boom was not simply a result of record low interest rates and noted that the RBA was focused on ensuring lending standards improved.
He said the RBA took into consideration what was happening in all property markets across the country, not just Sydney, when deciding whether to adjust the cash rates.
