Property and construction are crucial to most economies and that's certainly the case for Australia over the next year.

Most analysts are factoring in lower growth or even a downturn in residential construction. This will see it make a negative contribution to GDP growth. Any plateauing or softness in property prices would also make it easier for the RBA to cut interest rates again should it see the need to do so.

According to property group, CoreLogic, average capital city property prices had solid gains in April and May. This was despite declines in Perth and Darwin. The 5 city aggregate was up 10.5% for the year.

However, today saw release of data that may point to signs of looming headwinds.

According to the Bureau of Statistics, the value of home loans to investors fell 5% in April. The overall trend in investor loans now looks to be clearly softening. Over the first 4 months of 2016 it declined at the rate of 6% pa. Combined lending to investors and owner occupiers was down 1.8% for the month This is significant for the revenues of the big 4 banks as well as for the overall economy

CoreLogic also released its latest update on rents this morning. They note that annual rents fell 0.3% in May on a year on year basis. Weekly rents were flat. Rents in the mining cities Perth and Darwin were down significantly over the year. Overall rent increases in Sydney and Canberra were flat. Lower interest rates are taking some of the heat out of weak rental yields for investors but overall this will be a negative of property investors.