Market economists see the cash rate increasing in the second-half of 2019, but Mr Evans on Tuesday extended his forecast for no change in policy settings until December 2020, from March 2020.

Earlier on Tuesday, Dr Lowe told Australians to get their household budgets in order to prepare for higher rates - "at some point" - being almost eight years since the last increase. The minutes of the Reserve Bank's August meeting, also issued on Tuesday, repeated the guidance that the next move in interest rates is probably up.

He also urged borrowers to keep in mind that house prices fluctuate and "there is no guarantee that your home will be worth more tomorrow than it is today. So plan accordingly." Sydney and Melbourne have experienced reductions in house prices this year.

Finance extended to residential property investors has declined in response to macro-prudential controls and is likely to slow further after falling 25 per cent in the last year, according to Westpac.

RBA governor Philip Lowe said on Tuesday that rates will rise "at some point" and households should be ready. Louise Kennerley

"Some may argue that we are unrealistically forecasting that Australia will completely miss the global rate hike cycle if rates remain on hold for such an extended period," Mr Evans wrote. "We differ from that view arguing that financial conditions are affected by more forces than just the RBA cash rate."

Wholesale funding costs have increased for the banking sector, and for corporate borrowers.

Aside from ongoing macro-prudential supervision and regulation, "no further conventional tightening of policy through a rate hike from the Reserve Bank seems likely - even as far out as 2020".

"The key dynamic here is an expectation that the household can continue growing its consumption spending at around a 3 per cent pace," which would require solid wages growth and any wealth-effect spillover from house prices to be neutralised. That seems unlikely, Mr Evans concluded.