Central bank economists have denied claims that Australia's housing market is in a bubble, although investors are concerned over prices posting a 19 per cent rise this year and more than 160 per cent increase in the past decade.

A new research paper from the Reserve Bank of Australia asserts "The ratio of housing prices to income has been reasonably flat for a number of years."

The RBA noted in the minutes of its September board meeting that "conditions had cooled in the established housing market, partly reflecting the return of mortgage rates to more normal levels".

"At the national level, prices had been broadly unchanged since April, with the top end of the market tending to be softer than the rest of the market," it said.

The RBA's research paper outlined the differences it believes exist between the current housing market and the bubble in the early part of the last decade, and dismissed claims that action taken by the RBA during that time was ineffectual in the long term and has led to current high prices.

"Looking beyond 2004, it has been suggested that the turnaround was temporary, that house prices did not fall by much and have subsequently rebounded," the research paper said.

"However, this ignores some important and persistent effects of the turnaround that started in late 2003."

The central bank said that auction prices for Sydney and Melbourne homes had recently been at a level around average, after rising briefly earlier in the year.

"Housing loan approvals were estimated to have been broadly flat in July and were well below their peak in late 2009."

Earlier this month, Commonwealth Bank of Australia, the nation's biggest mortgage lender, also refuted commentary from Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co., and Gerard Minack, chief strategist for global developed markets at Morgan Stanley's Australian unit, that the nation's housing market is in a bubble.

CommBank said concerns about a housing bubble in Australia are driven by a "superficial or incomplete analysis" of the nation's property market.

"Taking into account geographic differences, the ratio of house price to income in Australia is not that much different to most other comparable countries," the Sydney-based lender said.

"Population growth and excess demand relative to supply has been a key driver of Australian house price appreciation -- these factors are unlikely to reverse in the near term."