The Reserve Bank of Australia left interest rates on hold, but it also signalled that a policy tightening isn't too far off as inflation looks set to rise further.

The RBA left its cash rate at 4.75%, where it has remained since November 2010.

A leading private sector estimate of consumer inflation continued to rise in April, keeping the central bank on track to raise interest rates later this year.

The TD Securities-Melbourne Institute monthly gauge of inflation rose 0.3% in April, following a 0.6% rise in March and 0.2% rise in Feb. Over the year to April, the inflation gauge rose 3.6%, following a 3.8% rate for the year to March.

The weighted average price of established houses in capital cities fell 1.7% in the first quarter of 2011 from the fourth quarter 2010, the Australian Bureau of Statistics said.

The house price index also showed the weighted average price of established houses in Australia's eight capital cities was down 0.2% from a year before. The house price index for Sydney fell 1.8% in the first quarter, and rose 0.8% from a year earlier.