Government handouts to help first homebuyers eventually get swallowed up in higher priced houses, the deputy governor of the Reserve Bank has warned.

Ric Battellino, in a speech to the National Housing Conference in Melbourne this morning, said first homebuyers had been the worst affected by the run-up in Australian housing prices in recent years.

He said while overall it appeared Australians were easily managing the increase in prices, assistance directed at first home buyers might actually be counter-productive.

The deposit needed by a first home buyer was now about one a quarter years' income, almost double the level it was 15 years ago.

"Various governments have sought to provide concessions to first home owners through grants or tax relief," he said.

"However, while these measures assist the first wave of buyers who are able to take advantage of them, the benefits diminish over time to the extent that these concessions become capitalised into higher house prices."

Mr Battellino played down comparisons of the relative high price of housing in Australia compared to the United States.

He said while it did appear the ratio of home prices to income in Australia was higher than in the US, that did not necessarily mean Australians were being overly stretched by their mortgages.

Lower costs in other areas, such as health, meant Australians could spend more on housing than Americans.

And Australians appeared more keen to pay off their mortgages.

"The faster pay down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty," he said.

"Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income."