Reserve Bank of Australia Governor Glenn Stevens said it is too early to know if Australia will manage the 'handover' from mining to non-mining investment without suffering a slump.

"If we manage to absorb the upward phase of the biggest terms of trade boom in more than a century without overheating, and the downward phase without a slump, that would be a major achievement," he said in a speech to the American Chamber of Commerce in Brisbane on Wednesday.

There are some promising early signs that may turn out not too badly. "It is far too soon to think about counting any chickens yet," he added. "Let's also be clear that the capacity to fine-tune these outcomes is very limited," said Stevens.

Further, he noted that fiscal sustainability and ageing population pose challenges to the economy over the medium term.

"The answer - the only answer - is growth," Stevens said. "To some extent we will, hopefully, be able to lessen the problem through higher labor participation, for longer."

Earlier this week, the central bank left its key rate unchanged at a record low 2.50 percent. Policymakers viewed that a period of stability in interest rates is likely to be the most prudent course.

On the housing sector, Stevens said the Queensland housing market is now lifting off the bottom.

"Even if a full-blown crisis does not eventuate, as was true of Australia, overdoing it on housing on the way up is usually followed by a fairly extended period of working off the problems," he said.

RTTNews