The spectre of a housing bubble has again been raised, this time by a commentator who previously dismissed such concerns.

Economic commentator Christopher Joye, who famously debated economist Steve Keen in 2011, has argued in an article in The Australian Financial Review that Australia is in the midst of a housing bubble.

Joye took on Keen in February of 2011 in a televised debate on Business Today, arguing against the existence of a housing bubble. But Joye has now claimed that Australian housing is overvalued.

"When the Reserve Bank of Australia deploys its alternative assumption – which is the more modest annual house price growth rate since 2004 of about 4 per cent in nominal terms – its model finds that Australian homes are 19% overvalued.

“This just happens to be the same result you get if you compare the house price-to-income ratio to its average since 1993. Other credible benchmarks on which to base future house price appreciation – including household income growth, the returns consumers think they will get and the rate at which rents rise – similarly imply that housing is overvalued by between 20% and 30%," Joye said.

Joye said the Reserve Bank of Australia has dismissed the idea of a housing bubble because credit growth is low. He argued that this was a misconception on the part of the Reserve Bank.

"This is muddle-headed for two reasons: first, housing credit growth is outpacing incomes, which is the key criterion; second, credit growth is only meaningful in respect of the light it sheds on changes in the level of household leverage and the probability of borrowers defaulting," Joye said.

While house price growth has seen a slowdown, Joye argued that this was seasonal and that prices are not cooling.

"With banks promoting the cheapest mortgage rates ever, I suspect Australia’s nascent housing bubble will get bigger," he said.