Reserve Bank of Australia governor Philip Lowe has signalled he won't let let low inflation - and weak wages growth - to become entrenched while conceding there may be risks, including a fresh surge in house prices in Sydney.

In his first speech as governor, Dr Lowe left open the door to further official rate cuts by emphasising that inflation is likely to remain low and that the economy is still some way from generating enough jobs to reignite strong wages growth.