New Treasury chief John Fraser does not think rising house prices are a huge risk to the economy.

While he doesn't believe pockets of sharply rising prices - such as in Sydney - are healthy, he thinks it's a contained issue and not a general risk to the economy.

"I don't rate it that highly as a huge risk," Mr Fraser told a Senate estimates hearing on Wednesday.

He said low interest rates and foreign demand for housing is behind the rise in Sydney prices but he is also concerned about the availability of land.

He is confident measures taken by the Australia Prudential Regulation Authority to curb investment lending will be successful.

[Source: www.sbs.com.au]