New ABS data reveals that home loan approvals took a 3 per cent hit from July, down to 53,109 approvals for August.
The overall value of home loans fell to a total of $31.4 billion, still down more than 5 per cent from its peak in April 2015, while investor lending fell 18.5 per cent on the same high.
Mortgage Choice chief executive John Flavell says these falls were occurring across the housing board.
“This drop could largely be attributed to a fall in both the number of home loans written for the purchase of new dwellings as well as the purchase of established dwellings,” Mr Flavell said.
According to the QBE Housing Outook report, investors entering the residential market has dropped, with investors making up 44 per cent of all residential loans, down 7 per cent on last year.
That's likely to improve housing affordability according to QBE lenders' mortgage insurance chief executive Phil White.
“It’s expected owner occupiers, including first home buyers, will be stepping in to pick up some of this opportunity in the market," he said.
Loans for established dwellings especially took a hit in August, experiencing a drop of 3.9 per cent on the previous month
Despite this, Mr Flavell remained confident that other factors would correct this dip in the coming months.
“It wasn’t all bad news however, with the number of home loans for the construction of new dwellings rising 3.7 per cent over the course of the month,” he said.
“Spring is a notoriously hot selling season [and] this, combined with the fact that interest rates continue to sit at record lows, I would not be surprised to see an uplift in the number of home loan approvals between now and the end of the year.”