The Reserve Bank of Australia held its benchmark interest rate steady at a record low of 1.5 percent at its April board meeting on Tuesday, as widely expected. The central bank issued a stern warning at mortgage lenders, knowing any change to interest rates is a risk to fragile economic growth.

In a strongly-worded statement on the mortgage market, RBA governor, Philip Lowe said the "ongoing increases in indebtedness and rising housing prices" were a "risk to the future health of the Australian economy. Stretched balance sheets make for more volatility when things turn down".

The comments around domestic inflation and wage growth were little changed, with the Bank continuing to expect only a gradual pick-up in underlying inflation. The Bank reiterated that “conditions in the global economy have improved”, noting that “labour markets have tightened in many countries”. Despite this, “core inflation remains low”.

"We continue to see rates on hold at 1.5% for an extended period, with concerns around persistently low inflation offset by the strength in the housing market. The RBA will be keenly awaiting the Q1 CPI (due out on 26 April) for an update on inflation," said ANZ in a report.