The Reserve Bank has warned of even higher house prices as figures show that interest rate rises and the end of the first home owners boost appear to have slowed lending in Victoria to its lowest in five years.

The Bureau of Statistics says only 525 Victorians borrowed money to buy new houses in January, down from 835 in September, before rates rose and the first home owners boost wound down.

Loans to buy established houses slid from a high of 13,050 in June to 8457 in January.

The slide was evident in the rest of the nation, with borrowing collapsing 10 per cent in Queensland and 7 per cent in NSW compared with 3.7 per cent in Victoria.

''Things are likely to look weak from here on,'' said CommSec economist Savanth Sebastian.

''Potential home buyers brought forward planned purchases to 2009. Overall the housing sector is likely to cool for the next few months.''

Detailed consumer sentiment figures released yesterday echoed the lending news.

The proportion of Australians agreeing that ''now is a good time to buy a dwelling'' fell from 53 per cent in December to 42 per cent in March.

In September, before the rate rises and the phasing out of the boost, 62 per cent of those surveyed believed it was a good time to buy a house.

The proportion agreeing that the wisest use for savings was ''paying down debt'' climbed to 27 per cent, its highest on record.

Reserve Bank assistant governor Philip Lowe told an urban development conference in Sydney to expect increases in house prices unless something could be done to ease ''constraints'' on the construction of new houses.

''With population growth above average, and growth in the housing stock below average, it is not surprising there has been upward pressure on housing costs,'' he said.

''If we are to build more dwellings, we need to ensure that planning guidelines and infrastructure provision can accommodate this.''

For the first time in decades, the long-term trend of fewer people living in each dwelling had gone backwards.

''Obvious examples are the trend towards young adults staying in the parental home longer and a rise in the number of people sharing accommodation,'' he said.

Dr Lowe said while much more money had been poured into housing than before, much of it had been spent on renovations and bigger houses rather than on more new houses.

''In a sense, as a society we have made a trade-off between quality and quantity. We have implicitly chosen to build bigger and better-appointed dwellings rather than more dwellings,'' he said.

Other analysts questioned the worth of the ABS figures.

''I have always held a special kind of hatred for colleagues who react to data with a nonchalant 'I don't believe the numbers','' said ICAP Australia's Adam Carr.

''But I have to confess I am sorely tempted. The reported fall in lending is at odds with auction clearance rates, house-price growth and building approvals.

Call me stubborn, but I'm not getting overly concerned just yet that lending is genuinely collapsing.''