Domain Group senior economist Dr Andrew Wilson said banking regulator APRA had not provided detailed modelling to show why it believed the investor market was overheated and needed restrictions.

“Where’s the heat? I don’t understand where the heat is,” he said. “We have the lowest level of mortgage defaults we’ve seen. Affordability is still below average levels.”

“We’ve had interest rates on hold for four months, so that means affordability has plateaued and price growth will plateau as a consequence,” he said.

APRA announced last December that one of its “specific areas of prudential concern” would be any bank growing its investor lending by more than 10% per annum.

Wilson believes that interference from policy makers could cause problems later.