The Reserve Bank has raised concerns about the low interest rate environment, fearing a quicker-than-expected rise in house prices - spurred by low interest rates - could encourage households to take on more debt again.
The view is found in the RBA's monetary policy statement, released on Friday after its decision to cut the official cash rate to a historic low of 2.75 per cent this week.
On Friday the dollar dropped to its lowest level since June last year, to US100.47¢, after the US created 165,000 jobs last month.
The growth in jobs meant the US unemployment rate fell slightly to a four-year low of 7.5 per cent.
The dollar recovered slightly after release of the RBA's monetary policy statement, and it closed the week near US100.64.
"In the household sector, a key risk is that established dwelling prices rise more quickly than assumed, spurred by low interest rates," the RBA statement said.
"The associated boost to wealth and sentiment could, in time, generate stronger-than-expected consumption growth. If these were accompanied by a return to increasing household leverage, it would raise concerns from a financial stability perspective."
But ANZ economist Justin Fabo said households were unlikely to take on more debt based on the RBA's downbeat outlook on employment and income.
"The risk of this happening is low, given households' attitudes towards debt appear to have changed substantially since the global financial crisis and because labour market conditions are expected to remain soft," Mr Fabo wrote in a note.
The Reserve surprised many when it cut the cash rate by 25 basis points this week. Economists said there was more interest than usual in the monetary policy statement but the RBA did not explain why it cut the rate.
"The statement presented a golden opportunity to put forward a strong message given the non-consensus rate cut on Tuesday," Citi economist Paul Brennan wrote in a note to clients.
"[But] that the message was mostly a repeat of the benign central view of the February edition suggests that the RBA has no strong conviction to follow up with another rate cut in June."
But TD Securities' Alvin Pontoh said the outlook for inflation was a little softer in the near term than predicted in February.
"We get a sense that the view has evolved towards a more cautious one ... particularly on the labour market front," Mr Pontoh said.
But overall, the RBA statement was upbeat about the local economy and its transition to non-mining-led activity.
"Growth of Australian major trading partners is expected to continue to exceed that of the world, reflecting the faster growth of Australia's trading partners in Asia," it said.
"The forecast for consumption spending has been revised a little higher since the February statement as prospects for household demand appear slightly more positive."