THE Reserve Bank governor's comments in his surprising series of television interviews this week concentrated, among other things, on dampening any potential enthusiasm for speculative activity in a rapidly rising housing market.

Property prices have risen by well over 10 per cent in the past year, driven largely by population growth that continues to increase the gap between demand and supply of housing. The danger is that potential home buyers start entering the market, simply to get a leveraged investment into a market expecting quick gains.

This speculative activity, or flipping of houses, was a key feature of the pre-GFC US housing market with skyrocketing prices and oversupply of properties being a key reason for the subsequent crash in prices of more than 30 per cent.

Mr Stevens' main point in the first of his interviews was that investing in property is not a riskless exercise and dangers await those who think there are easy profits are to be made. With his hand on the interest rate lever, he should know better than most.

This RBA warning to potential new entrants into the market contrasts with the relatively low level of risk that the RBA associates with those who entered the market in the past year, particularly the significant numbers of first home buyers.

In its biannual Financial Stability Review released in March, the RBA spends a lot of time analysing the likelihood of any material change in home owners' ability to repay mortgages. The first thing to note is that Australian arrears rates remain very low by international standards and haven't changed much over the past year. By loan value, only 0.6 per cent of loans on the banks' balance sheets were non-performing, compared with nearly 8 per cent in the US and more than 2 per cent in Britain.

But what about all those first home buyers who some claim borrowed too much when rates were low and won't be able to afford repayments when rates rise?

Tightening underwriting standards and falling numbers of first home buyers as 2009 came to an end has meant that only 17 per cent of new owner-occupied housing loans have a loan-to-value ratio over 90 per cent, down from 27 per cent a year ago.

The report also says that ''partial credit bureau data suggest that the creditworthiness of recent first home buyers has been broadly similar to earlier cohorts of first time borrowers''. That is, last year's first home buyers are about as unlikely to default as they have always been.

This is not particularly surprising when you think about it.

Many first home buyers entering the market last year had been kept out by affordability issues in the previous five years. When they could finally enter the market, sure, they were taking out bigger loans, but they had bigger families to house and bigger incomes to pay their mortgages.

The RBA is clearly more concerned with the risk associated with speculators entering the property market in 2010 than with the risk of the first home buyers who took advantage of low rates and the first home owner boost to enter the market during 2008 and 2009.

Matthew Bell is senior economist for Australian Property Monitors.