Reserve Bank Governor Glenn Stevens made a rare unplugged appearance at the Trans-Tasman Business Circle in Sydney, leaving himself open to questions for dozens of business executives and journalists.
It was was his first public remarks since the RBA's decision to cut interest rates earlier this month, after inflation fell below its 2 to 3 per cent target band.
"There's been some commentary that I think is to the effect that we need a different target, or another system, I don't actually agree with that," Mr Stevens said.
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That comment saw our currency slide about half a US cent, and is now down nearly 7 per cent since the beginning of the month.
"At the moment it's doing what you'd expect it to do given the circumstances we face."
Mr Stevens addressed speculation of an oversupply in housing suggesting after years of deficit construction seems to be meeting population growth.
"We were certainly not building enough dwellings at one point and we're much closer now, I think to, at least in numbers, adding to the stock the sorts of additions we need for population growth. Whether they're the right dwellings in the right places is also another question."
It comes as Macquarie Bank listed 50 risky postcodes for apartment buyers while tightening its lending practices to those investing in such areas.
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Westpac meanwhile has relaxed its approach, increasing its loan to value ratio from 80 to 90 per cent.
CMC Markets Analyst, Michael McCarthy says that means borrowers only need a 10 per cent deposit to obtain a investment loan.
"The reduction in lending to the investment segment has hurt Westpac's bottom line. It's well below the current speed limit set by APRA, it's lending's growing at around 7 per cent and the speed limit at 10 per cent gives it room to increase that lending again."
Mr Stevens however has this warning.
"The assumption that there is an easy road to riches through the leveraged holding of real estate, it strikes me, however that may have succeeded for some in the past. That is not a great strategy."
"Prices can fall, they have fallen, I think while I've been in this job we've seen them fallen two or three times"
That job ends in September when Phillip Lowe takes over.
