Wayne Byres, chairman of the Australian Prudential Regulation Authority (APRA), has declined to enter into the debate over whether Sydney faces a housing bubble crisis, saying the “B word” oversimplifies a more nuanced issue.

On Thursday, Byres was asked by Greens senator Peter Whish-Wilson about the recent housing bubble report from UBS. The report ranked Sydney fourth in its 2016 “Global Real Estate Bubble Index”. UBS’ index is designed to track the risk of housing bubbles in global financial centres.

Byres, who oversees a banking sector with almost $1.5 trillion in mortgages, acknowledged that there were risks in the Sydney property market, but said the “B word” was not constructive. "I deliberately avoid using the B word. I think it sort of simplifies the debate somewhat," Byres said in Canberra.

"It leads people to either, we are, in which case we're all ruined, or we're not, in which case, [everything will] be right. And in fact the situation is far more nuanced than that."

According to the UBS Index, Sydney prices have risen by about half since 2012. To prevent the housing market from overheating, APRA has in recent years clamped down on poor lending practices by banks and has curbed lending to investors.

Alongside other regulators, APRA has repeatedly warned that cheap debt, rising prices, and very slow income growth only heightened the risks in an already precarious housing market. "Prices are very high. Household debt is very high, and income growth is fairly subdued, so it's an environment in which a fair bit of caution is needed," he said.