Just what to make of the recent slew of housing data?
Last week, the April Cotality survey found capital city housing prices reported their softest monthly rise since January 2025, with all capitals recording softer results compared to March, while new auction listings hovering around historical norms.
Today's offering from the ABS reported dwelling approvals declined 10.5% month-on-month in March following a sharp lift in February.
On lending data, housing credit rose a steady 0.6% in March, and overall private sector growth rose 0.7%.
In a note today, ANZ economists Madeline Dunk and Jack Chambers argue that Australia's housing market is continuing to lose momentum, not just because of slowing price growth, but the pulse in investor housing credit growth is also moderating, and building approvals are likely to continue to fall.
"Looking ahead, we expect approvals to slow as higher materials costs add to broader feasibility concerns for the sector," the ANZ pair wrote.
NAB's head of Australian economics, Gareth Spence, has taken a deeper dive into inflationary pressures in the housing construction sector via last week's producer price inflation data.
"In terms of individual inputs into detached housing construction, Q1 saw increases in electrical equipment (driven by higher copper prices), other metal products (including higher prices for copper and aluminium) and pre-mixed concrete (driven by higher energy, transport, raw materials, and labour costs)," Mr Spence said.
"We know that a broad range of these products will be pressured by unfolding events in the Middle East, with energy, inputs (plastics), and transport costs likely to pressure a broad range of these inputs in coming quarters.
"Given new dwelling purchases by owner-occupiers account for ~7% of the CPI basket, ongoing construction cost pressures will likely contribute to a pick-up in housing inflation."
J.P. Morgan economist Tom Ryan agrees housing activity is likely to soften, but notes that the dwelling approval data is not so bad.
"Often obscured by month-to-month volatility, the underlying trend in building approvals remains positive," Mr Ryan said.
"Detached housing approvals are now growing at 11.4% oya (over-the-year) and high-density unit approvals, in trend terms, are up over 16% oya.
"We largely attribute this growth to the lagged effects of strong population growth over 2023/24, the availability of credit and normalization of building input costs post-pandemic.
"From here, the outlook for housing market activity looks softer, with higher interest rates and easing house prices likely to weigh on approvals in the second half of the year."