The Reserve Bank is in no rush to hike interest rates despite its concerns about rising house prices.
The central bank made particular mention of soaring capital city prices at their latest monthly meeting, deciding the risks associated warranted "close observation".
"Additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later," the RBA said in the minutes of the meeting.
Such a fall in prices could spark a bout of caution among households, and cause a slump in consumer spending, the bank said.
But the minutes reiterated the RBA's stance that it won't be changing the cash rate any time soon.
It is widely expected a rise will not come until mid-2015, almost two years since its last move, a cut of a quarter of a percentage point to 2.5 per cent in August 2013.
Commonwealth Bank economist Gareth Aird said RBA governor Glenn Stevens has all but ruled out any further rate cuts.
"The RBA has done as much as they can in creating a backdrop that should support economic growth," he said.
"Market pricing for a rate cut has waned significantly over the past two weeks."
Commonwealth Bank predicts the cash rate will stay unchanged until a hike in the June quarter.
But Queensland University of Technology financial economist David Willis said the RBA must increase the cash rate in October or November.
"Leaving rates on hold through the Summer will allow the housing market to potentially enter into a full boom, which would need significant monetary policy change to bring it from the boil," he said.
"I think the RBA will realise they need to act before it's too late."
Dr Willis said it was also important to lift the cash rate to reduce inflationary pressure as the Australian dollar falls below 90 US cents.
A lower exchange rate would deliver a potential spike in inflation as the cost of imported goods rises, Mr Willis said, and higher interest rates would allow the economy a smoother adjustment.
The RBA minutes indicated the central bank was more confident about the economy and an improvement in non-mining investment in the coming quarters.
Low interest rates continue to support the economy and encouraged more risk-taking investment, the bank added.
"Investors continued to look for higher returns in response to low rates on safe instruments and were accepting more risk in doing so," the bank said.
