First home buyers are keeping a steady toehold in the property market even while demand for owner-occupier mortgages declined for a third straight month.
People getting on the housing ladder for the first time made up 17.9 per cent of loans granted in February compared with 18 per cent in January, a tight range that has been in place since November, new figures on Thursday showed.
"From the perspective of getting first home buyers into the market, the NSW and Victorian state governments' stamp duty incentives are working a charm," ANZ senior economist Daniel Gradwell said.
This proportion is at a five-year high and is comfortably above the most recent 12.9 per cent trough reached in March 2016, Australian Bureau of Statistics data shows.
However, it remains well shy of the peak in May 2009 when nearly a third of loans went to first-time buyers.
Demand for owner-occupied loans more broadly fell 0.2 per cent in February to 54,427 mortgages, with growth now having dropped five times in the past six months.
JP Morgan economist Henry St John said this likely reflected the imposition of stricter lending practices, "particularly through the banking royal commission period".
Westpac announced this week it was cracking down to stop so-called "liar loans" where applicants may have exaggerated their income and understated their expenses and liabilities to obtain a mortgage.
Other major banks are expected to follow this new hardline regime which followed allegations of "sloppiness" in lending practices in the first few weeks of the royal commission.
Meanwhile, the value of loans to investors rose 0.5 per cent after the 1.4 per cent rise in January, the first back-to-back increases in 18 months.
Housing Industry Association's principal economist Tim Reardon said while there are signs of investor interest stabilising, the value of such loans is nearly 10 per cent down since the Australian Prudential Regulation Authority imposed stricter lending rules on these applicants in April 2016.
"Investor participation in the housing market is vital for delivering enough rental accommodation to house a growing workforce, especially in economic hubs like Sydney and Melbourne," Mr Reardon said.
He said investors have been the target of a number of regulatory interventions which has impacted on new residential developments, particularly apartments.
