Though the Australian economy has recorded more than 25 years of continuous economic expansion, a world-wide record, the 0.3 per cent growth recorded during the March quarter was subdued, weighed down by housing investment and exports, says the HIA.

The economy grew only 1.7 per cent for the year, a rate of around half the Reserve Bank's target.

“A decline in housing investment and a decline in exports were the major factors contributing to the relatively subdued growth in the economy this quarter," says Shane Garrett, senior economist with the HIA.

“The sharp drop in the quarterly investment in housing this quarter confirms that housing activity has passed its peak,” said Garrett.

“Investment in new housing fell by 4.4 per cent in the March Quarter 2017, which brings the sector down from record high investment in December 2016 and back to levels similar to those experienced at the start of 2016," he said.

Garrett said the trend varies across the country.

"This trend is not consistent across the economy as some regions, particularly metropolitan areas, continue to show strong activity.

Poor weather also contributed to the weak March result for housing investment.

“Quarter by quarter fluctuations are expected," he said, "and poor weather did contribute to the weak result in the March 2017 quarter.

Garrett said a large volume of work remains in the pipeline, which should keep housing investment at historically high levels.

“There is still a significant volume of work that remains to be done on projects at various stages of construction which is expected to see the level of investment remain close to a historically high level over the next few quarters," he said.

“In the context of the residential building cycle cooling off a record high, investment in apartment building is holding up with a record number of new apartments still being constructed."

Garrett said that residential construction has a strong driver of economic growth. 

“Residential construction, augmented by the substantial multiplier impact of industry activity through to the broader domestic economy, has been a mainstay of Australia’s economic growth during the last four years. It has been a strong driver for economic growth," he said.

The Australian economy has now recorded 103 quarters of recession-free growth, where a recession is defined as two consecutive quarters of economic contraction. This milestone matches that of the previous record-holder, the Netherlands, according to media reports.

Read more about residential construction:

Construction of apartments overtook houses in December quarter

Building approvals data confirms softening housing market

Building approvals rose strongly in November