House prices in Australia are rising at unexpected levels amid the impacts of the pandemic. Does this already warrant an intervention from the Australian Prudential Regulation Authority (APRA)?

Wayne Byres, chairperson of the APRA, said it was too early to roll out macroprudential controls to moderate house prices.

"Let me remind you that we have no mandate to target the level of housing prices, or act to improve housing affordability. For us, housing prices are a risk factor, not a goal," he said in a Reuters report.

Dwelling prices across Australia increased by 2.1% on a monthly basis, the highest monthly gain since August 2003. Byres said this could be attributed to the record-low borrowing rates.

"It is a nuanced picture. There does not seem cause for immediate alarm. Nor, though, for complacency. We are obviously watching risk-taking by the banking sector closely," he said.

A report from Archistar said the markets, especially in Sydney and Melbourne, have become relatively affordable despite the recent price gains. This, however, could further put upwards pressure on house prices.

"With mortgage rates having fallen by over 1% and incomes have Increased by over 6% since 2017, there is significant capacity for buyers to push up home prices," the report said.

All capital cities are expected to record robust price increases over the next months. However, the growth rates are likely to slow through the second half of the year as affordability declines.

"House price growth will likely reach record levels with the Melbourne and Sydney markets likely to exceed 10% over the year," the report said.