Opposition MPs have accused Prime Minister Tony Abbott of being out of touch on housing affordability and ignoring Treasury advice that Sydney and Melbourne are facing a price bubble.
Treasury boss John Fraser sparked a political debate telling a Senate committee this week that Sydney and wealthier parts of Melbourne were "unequivocally" in a housing bubble.
But Mr Abbott says price trends differ across the country and national policies should not be based on what is happening in one city.
Labor MP Matt Thistlethwaite says not one week goes by without someone in his electorate of Kingsford-Smith in south-eastern Sydney voicing concerns about housing affordability for their children.
Mr Thistlethwaite says his constituents are living in one of the hottest housing markets in the country.
"It's out-of-touch Tony and God help us all," Mr Thistlethwaite told reporters in Canberra on Wednesday.
Labor colleague Ed Husic, who represents Chifley in western Sydney, warned the prime minister to take notice of Mr Fraser's advice and act to "cool the market down".
"You would think a prime minister would listen because when those types of bubbles burst, it's bad news for homeowners when prices spiral out of control," he said.
"This has been described as a market frenzy."
Liberal MP Dennis Jensen believes the answer could be increasing land supply in cities like Sydney, which would "certainly" push house prices in some areas down.
"When you limit supply in terms of land release, you're going to push prices up," he told reporters.
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