Australia's house prices will hold up better than those overseas, despite the slumping economy, the Reserve Bank said, largely because of the quality of the loans underpinning the market.

'We continue to believe that the market here will hold up better than overseas,' RBA deputy governor Ric Battellino said in a speech to the Urban Development Institute of Australia in Brisbane.

'There are a number of reasons why this is likely to be so, but perhaps the most important is that we did not have the same deterioration in lending standards that occurred elsewhere.'

The Age