The Senate Economics Committee Inquiry into Affordable Housing heard from Malcolm Edey, Reserve Bank of Australia assistant governor (financial system), that the RBA and APRA would be working to limit risky home lending to investors.However, with housing loan interest rates as low as they have been in a generation and households currently not "artificially constrained" from borrowing "as much as they can reasonably be expected to repay", the ratio of housing prices to income now sits at the top of its historical range. So whatever approach the regulators take has to not damage a stretched residential housing sector.Edey said the problems were largely with the supply side of the ledger and, because additional demand results in higher prices over time, "due attention needs to be given to supply-side factors in any policy response to perceived problems of affordability.""Targeted assistance can certainly help particular groups such as first-home buyers," Edey conceded, "but without a supply-side response, any generalised increase in demand will just be capitalised into prices."National housing prices have been rising at a rate of around ten per cent over the past year, and around 15 per cent in Sydney. Loans to investors currently account for close to 50 per cent of new housing loan approvals, (with the percentage highest, overall, in NSW).  Edey told the committee that the RBA was discussing with APRA "steps that might be taken to reinforce sound lending practices, particularly for investor finance, though not necessarily limited to that."When asked what specifically was being considered, Edey - backed by Luci Ellis, RBA's head of financial stability - skirted around which options might be considered, deferring to APRA. And while he said he wasn't "ruling anything in or out," when pressed again on the use of the unnamed macroeconomic tools Edey said imposing restrictions on loan-to-value ratios, as has been done in New Zealand, was "unlikely."Ellis told the hearing that the imbalance was primarily in the Sydney and Melbourne markets, where the increases in house prices were concentrated. "We are worried about what the downside of that house price cycle would look like," she said.Mr Edey said it was likely an announcement on any macroprudential tools would be made before the end of the year.