The Reserve Bank has kept the official interest rate on hold. Picture: AP.
The Reserve Bank has kept the official interest rate on hold. Picture: AP.

The Reserve Bank has left official interest rates on hold and taken the chance to signal they will stay that way for some months to come.

Following its April meeting this morning, bank governor Glenn Stevens confirmed the cash rate would stay at 2.5 per cent.

Mr Stevens said while current rate settings remained accommodative there was still softness in the jobs market with unemployment likely to edge higher.

"Interest rates are very low and savers continue to look for higher returns in response to low rates on safe instruments. Credit growth is slowly picking up. Dwelling prices have increased significantly over the past year," he said.

"On present indications, the most prudent course is likely to be a period of stability in interest rates."

Mr Stevens said the rate of inflation was likely to remain within the Reserve Bank's two to three per cent target band for the next two years.

The decision followed new figures from RP Data-Rismark which showed house values across Perth lifted by 0.6 per cent through March.

It was the best performance for the city's housing market this year. Over the first three months of 2014 house values have actually fallen by one per cent.

Over the past year, house values in Perth have climbed by 4.5 per cent.

Unit prices in the city jumped by 1.1 per cent in March to be four per cent higher through the quarter.

Sydney remains the nation's hottest market with house values there lifting by three per cent in the month to be 16.4 per cent higher over the past 12 months.

Melbourne values improved by 2.3 per cent, those in Brisbane were up by 3.2 per cent while in Adelaide they increased by 1.4 per cent.

RP director Tim Lawless said with such strength in housing prices the Reserve Bank may have little alternative but to move on interest rates sooner rather than later.

"If the pace of capital gains doesn't slow, we may see higher interest rates realised much earlier than previously expected," Mr Lawless said.

The West Australian

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