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Reserve Bank of Australia keeps cash rate at record low 1.5% as expected

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The Reserve bank of Australia held its benchmark cash rate at a record low 1.5 percent as widely expected, but noting the housing market presents challenges to policy.

"Conditions in the housing market continue to vary considerably around the country," Governor Philip Lowe said in a statement.

"Prices have been rising briskly in some markets and declining in others. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades. Growth in housing debt has outpaced the slow growth in household incomes. The recently announced supervisory measures should help address the risks associated with high and rising levels of indebtedness."

All 65 economists polled by Reuters predicted the central bank would maintain the cash rate at 1.5 percent at Tuesday's meeting.

"The broader story for the RBA has not really changed over the last few months. The big picture is they're continuing to manage growth and inflation objectives... against financial stability and house price concerns, so it's a difficult interplay," Andrew Ticehurst, rate strategist at Nomura Australia, said on CNBC's "Squawk Box."

Australia is scheduled to announce the 2017 budget on May 9 and analysts expect the government to tackle rising home prices in Sydney and Melbourne.

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