Banks have mostly tempered their housing finance lending practices, as they surf a wave of rising demand for investment loans.The half-yearly Financial Stability Review by the Reserve Bank of Australia concluded that "data on the characteristics of housing loan approvals suggest that lending standards in aggregate have generally been little changed since late 2011."It said there were "signs of an increase in high-LVR lending among some institutions," but said the aggregate share of banks' housing loan approvals with high LVRs was "around 13 per cent and has remained fairly steady for the past two years."Low-doc lending continued to account for less than one per cent of loan approvals in the December quarter 2013, while the interest-only share of new lending has been slightly below 40 per cent in recent quarters, following its gradual rise since 2009.Of more significance, the RBA said the aggregate mortgage buffer - balances in mortgage offset and redraw facilities - has risen to almost 15 per cent of outstanding balances, which is equivalent to around 24 months of total scheduled repayments at current interest rates. "This suggests that many households have considerable scope to continue to meet their debt obligations even in the event of a temporary spell of reduced income or unemployment," the RBA said.This factor means that credit growth "continues to be held down by prepayments and the low value of first-home buyer loan approvals which typically translate into larger increases in housing credit than loans to other borrowers."The RBA said any "upsurge in speculative housing demand would be more likely to generate financial stability risks if it brought forth an increase in construction of a scale that led to a future overhang of supply and a subsequent decline in housing prices."However, it said "Australia is a long way from the point of housing oversupply, though localised pockets of overbuilding are still possible."The RBA said a "build-up in investor activity may also imply a changing risk profile in lenders' mortgage exposures" since these loans "pay down more quickly than required."On a final note on topics of interest to the media, the RBA said non-resident investors and self-managed superannuation funds account for "only a small share of total housing lending."