RBA watches as home prices and mortgages go through the roof

[SYDNEY] Central banks from Scandinavia to the UK to New Zealand are sounding the alarm about soaring mortgage debt and trying to curb risky lending. In Australia, where borrowing is surging, regulators are just watching.

Australian household debt is at a 25-year high, according to statistics bureau figures, and a government inquiry this month found housing to be a significant source of risk to the financial system. The average mortgage is at least four times household income in almost 80 per cent of the country, research by Digital Finance Analytics shows.

While the UK, Denmark and New Zealand introduce measures including loan limits, caps on interest-only mortgages and repayment tests, the Reserve Bank of Australia and the country's banking regulator are holding their fire, saying that risky loans haven't increased significantly. The central bank also has said that the price gains so far are spurring needed construction, easing housing shortages in some areas.