CANBERRA, AAP – The Reserve Bank’s twice-yearly assessment of Australia’s financial system will likely garner more interest than usual as economists look for any hints of concern surrounding the housing market.

The central bank will release its financial stability review on Friday.

Following this week’s monthly board meeting, RBA governor Philip Lowe said it is important lending standards were maintained in an environment of rising house prices and lower interest rates.

However, Treasurer Josh Frydenberg has assured would-be property buyers his discussions with Dr Lowe and the head of the banking regulator found them “comfortable” with the state of the housing market.

What is clear, the RBA won’t be hiking interest rates if it believes the property market has become over-heated, with its aims of more normal inflation and low unemployment still well out of reach.

Dr Lowe noted strong demand from first-home buyers, but in contrast, investor credit growth remains subdued.

During Australia’s 2015 housing boom, financial regulators were forced to step in with a suite of measures to curb investor lending.

HSBC chief economist Paul Bloxham says unlike previous housing upswings, investors are not piling into inner city apartments, possibly because of concerns in renting out properties in the present climate.

But he says the housing upswing is evidence low interest rates are working.

“At this stage, it is likely to be the strongest mechanism through which the RBA is lifting growth, although the central bank would no doubt prefer to see a stronger pick-up in business borrowing and business investment,” he said.

“After many years of inflation below the target band, the central bank is looking to run the economy hot for a while and its seems that, given its only blunt policy instruments, another housing boom is the best option the central bank has to hand.”