Wage prices up 0.9 per cent
After missing expectations last quarter with just 0.7 per cent wage price growth, the economy righted itself in the March 2025 quarter, this time notching 0.9 per cent growth.
Over the year, wage price growth has steadied at 3.4 per cent.
The March quarter result was partly driven by a 1 per cent bump in public sector pay.
Private sector wages have been far more lacklustre over the past year, rising by only 3.3 per cent, posing little or no threat of a wages breakout driving inflation.
In that context, it probably wasn't a huge surprise that the largest growth in wages over the year was seen in Canberra and the ACT at 3.9 per cent.
Housing stymied
Overall, this was a slightly higher than expected result for the March quarter, reversing the previous quarter's weakness, and bringing wages growth in line with Reserve Bank forecasts.
A hiatus in the tariff turmoil has certainly becalmed markets over the past week or two, but there's little to suggest that the May interest rate meeting will be anything over than a 25 basis points cut.
Today's lending indicators figures showed that housing lending fell -3.4 per cent in the March quarter, as higher interest rates and tight lending setting stymied activity.
The construction sector has been effectively crippled, with 2,800 construction and development firms going bust over the past year.
However, while the regulatory 3 percentage points home loan lending assessment buffer has worked to decrease the number of loans and activity in the housing market, it has also largely served to shut out lower income earners in favour of households earning $200,000 or more.
The average new home loan size increased by $50,000 (ex-refinancing) over the year to March, driven by non-first homebuyers, for whom the average loan size increased by $64,000.
Interest rates are expected to fall from here, so the value of the buffer has more than run its course.
Lending for new housing supply remains fairly subdued.
Source: Housing Industry Association
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