Confidence improves as home prices find a floor

Home owners without mortgages are feeling a little more optimistic as the residential property market regains some lost ground.

Confidence among outright home owners jumped 3.7 points as per ANZ and Roy Morgan's weekly survey, driving the 1.8 point gain across the entire index.

ANZ senior economist Adelaide Timbrell said the lift in home owner confidence was much more convincing than the  0.5 point lift among renters and 0.6 point uptick among mortgage holders.

"This may be due to an uptick in housing prices in March and April," she said.

Home values have picked up modestly for two months in a row, according to CoreLogic data, following a 9.1 per cent dip from peak to trough that kicked off when interest rates started rising.

The overall score of 79.8 points to extremely negative sentiment as cost of living pressures and interest rate increases weigh on confidence. 

The central bank is due to meet on Tuesday for its May decision after keeping the cash rate on hold last month. 

But further tightening remains on the table and the nation's economists and analysts are divided on which way it will go.  

Three of the big four banks expect the cash rate to stay at 3.6 per cent in May, with neither Westpac nor NAB anticipating further increases.

CBA economists are predicting one more hike on Tuesday afternoon and ANZ thinks there will be one final lift in August.

The shadow board of economists at the Australian National University believes another 0.25 percentage point hike is the most likely scenario.

But they acknowledge "a degree of uncertainty" before the May decision following surprising upbeat jobs data and signs of resilience among businesses and consumers.  

Sinking March quarter inflation - falling from 7.8 per cent to seven per cent - may give the RBA board confidence to leave the cash rate unchanged for another month.

But some sources of inflation are proving persistent, such as rent and energy.