The Reserve Bank has issued a warning to investors amid overinflated prices that continue to climb.

Many analysts accuse investor of driving property prices to record highs on a recent buying spree, particularly in Sydney and Melbourne.

The Reserve Bank has warned that the continued increase of property prices could come crashing down, with damaging consequences for all households.

Economists and industry experts agree.

“It's a period of tread with caution, certainly in Melbourne and Sydney,” said Ben Kingsley, chair of the Property Investment Professionals of Australia.

“Those market places are in a hyper state and when you've got a hyper state like that, we tend to give back some of the gains that we make.”

He said that when property prices in a particular area exceed what people who will actually live there can afford, they become unsustainable.

When that happens, price rewinds are likely, Mr Kingsley said.

The property group says a balanced market would be made up of 70 per cent owner-occupiers and 30 per cent investors.

However, in NSW, investors have accounted for more than 50 per cent of all new lending since 2013.

“I think you could see a 10 per cent drop in prices potentially once the boom ends, like what we saw back in 2004/05 in Sydney - that's definitely a possibility,” CoreLogic RP Data senior research analyst Cameron Kusher told News Corp reporters.

“If the market slows, if you do need to actually sell quickly, it could be very hard to dispose of those properties.”

For anyone looking at investment properties in Sydney or Melbourne, the RBA says they need to understand that there will almost certainly be a “correction” in the future.