It said in the three months to April, national home values rose 6.8 per cent, which was the highest quarterly dwelling growth rate since December 1988. The total value of residential property had doubled in a decade.

And this weekend is expected to be one of the busiest this year with 3000 capital city properties going to auction.

And while the Reserve Bank restated on Friday that it was closely watching lending standards it said strong demand was a feature of the established housing market, but cost pressures and some delays to construction timelines were affecting new houses.

“This has pushed base prices for newly constructed detached homes higher, but the effect on measured inflation has been offset by the treatment of government construction grants,’’ it said.

“Household wealth has increased strongly of late, mostly because housing prices have risen, but also because households accumulated an unusually large amount of additional savings out of income over 2020,’’ the RBA statement said.

“If the spending response to increased wealth is stronger than usual, a stronger economic path than the one envisaged in the baseline forecasts would eventuate.’’

Australia’s economic recovery has exceeded all expectations and that will be reflected in the Reserve Bank’s latest policy statement, deputy governor Guy Debelle said.

“The recovery in the Australian economy has significantly exceeded earlier expectations, reflecting the sizeable fiscal and monetary policy support, as well as the favourable health outcomes,” Debelle told an online audience in Perth on Thursday.

“But significant monetary support will be required for quite some time to come.”

But a crucial issue for the Australian economy would be how much households might draw down from their savings to support their spending.

The RBA said that pool of savings was “unusually large’’ and it was possible that it could be directed to buying more assets or paying down debt.

The ANZ said the RBA had made a subtle change to its guidance on interest rates with a lsight increase in chances of a rate hike in 2024.

But not everyone has enjoyed success from the property boom.

Brisbane-based real estate lending company, Dealt, was today forced to scrap its $94 million capital raising because it could not achieve the minimum subscription level of $28 million.

Core Logic said the surge in residential real estate values followed the recent broad-based capital gains witnessed across the country, with many markets now at their peak.

CoreLogic head of research Eliza Owen said the rise in dwelling values put Australian home owners in a strong equity position, with the RBA estimating just 1.3 per cent of housing loans to be in a negative equity position at the start of 2021.

“However, for many Australians looking to get a foot on the property ladder, the continued strength in the market is putting home ownership further out of reach despite record low mortgage rates. Wages growth simply isn’t keeping pace,” Owen said.

-with AAP