Housing prices could be about to rocket as rising interest rates and rapid population growth create serious housing affordability issues across the country, according to a leading economist with the Reserve Bank of Australia.

Tony Richards, the head of economic analysis with the RBA, warned policymakers needed to do more to stop "undesirably strong growth" in housing prices as the economy improves.

 "Mortgage rates are particularly low at present and, as the bank has noted on a number of occasions, it is not reasonable to expect that interest rates will stay at the current low levels indefinitely," he said.

"Average annual population growth has been 340,000 over the last five years, up from 240,000 over the prior five-year period, an increase of around 40%.

"The number of dwellings we have built has not risen. Commencements of new housing over the past five years have averaged around 150,000 dwellings, versus around 155,000 over the previous five-year period."