The Reserve Bank of Australian (RBA) will front a Senate committee on Thursday to explain why it could be about to join forces with the banking regulator to secure tougher lending rules.

The RBA says investors are pricing first homes buyers in Sydney and Melbourne out of the market and has suggested making it harder to get loans could be one way to avoid a property market bubble.

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Practically that could see would-be borrowers having to prove they could cope with a significant jump in interest rates before getting finance.

Senators from both sides of politics have concerns about such a move and say they have requested the RBA front the committee in the interests of transparency.

Aussie Home Loans chief John Symond has labelled the suggestion of tougher lending criteria “premature” and “ridiculous”.

“I’m concerned that what the Reserve Bank is suggesting is fraught with danger and it may well have unintended consequences that will hurt first homebuyers and other sectors playing the housing market,” he said.

Labor Senator Sam Dastyari is the chairman of the committee and has spelled out potential problems he sees.

“The danger is unintended consequences whereby you kill off the only people that are investing in new housing stock,” he said.

“We have to be very, very careful, the RBA has not yet made the case and that’s why we’re hauling them before a senate inquiry this week and demanding some answers.”

Senator says first homebuyers should have access to super

Nationals senator Matthew Canavan is also worried about a lack of transparency.

“We seem to have more information on a typical bombing raid in Iraq or Syria than we do on the RBA’s and APRA’s plans for the roll out of so-called macro-prudential regulation,” he said.

Senator Dastyari said supply issues must be addressed.

“As we’re heading towards a population of 38 million by 2050 we have to be building six to seven million new homes to accommodate these extra people and nothing’s been done about that by the Government,” he said.

Senator Canavan said land release is a state government issue but thinks his government could do more too.

“I’ve suggested we allow people to access their superannuation to buy their first home, I think it’s very important we allow people to do that and it’s their money and they should have control of it,” he said.