Reduced demand from borrowers and tighter lending criteria saw new lending fall sharply in April.
According to the latest Australian Bureau of Statistics lending data, the value of new loan commitments for owner occupier mortgages fell 5 per cent in April, compared with the previous month, and new mortgage lending to investors fell 4.2 per cent.
The ABS said the fall in owner occupier commitments was driven by big falls in Queensland and Western Australia.
The number of first home buyer loan commitments was down 3.8 per cent, reversing the recovery in first home buyer participation that has been underway since late 2018.
The ABS said the fall in new housing finance would have been greater, except for a backlog of housing loan applications in March that were processed in April.
The value of new personal loans crashed by 24.8 per cent, month on month. The ABS said it was the biggest monthly fall in the history of the series and was driven by a 37.8 per cent fall in the value of loan commitments for vehicles.
Business lending was also hit hard. New business loans for construction fell 39.2 per cent in April and new loans for the purchase of property fell 7 per cent.