The U.K. property market is expected to rebound from a rough start in December, according to the RBA.
The government has cut interest rates to a record low in a bid to encourage more homebuilding and to ease the economic squeeze on the housing market.
RBA Governor Mark Carney said the property market had been recovering in recent months and he believed it would bounce back.
Carney said homebuilding would be more resilient than the broader economy.
He said the economy had not yet started to recover, and that the longer the recovery continued, the more risks we face.
Carney was speaking in a speech at the annual conference of the Institute for Fiscal Studies, which is an independent think tank.
The Bank of England will keep its benchmark interest rate at 0.25%, but the Bank of Japan will keep it at 0% for now.
Carney also said that inflation in the U.k. would rise to 1.5% in 2017.
The Federal Reserve is preparing to raise its benchmark federal funds rate to a 2% level and is likely to raise rates again in March, said John Halsey, a managing director at JPMorgan Chase in New York.
Carney noted that the British government has been taking steps to reduce its borrowing costs, which had risen to almost 10% of GDP, as part of efforts to boost growth.
Carney, speaking to the IFS in London, said the Federal Reserve would continue to be vigilant in responding to economic risks, including the potential impact of the Brexit vote.
He noted that while the risks were clear, the risks from Brexit are still “quite remote.”