Yet over the past 12 months, the value of new commitments was up 18 per cent.
Loans to investors had been growing faster than lending to owner-occupiers in the year to May, said the bureau's head of finance statistics Fiona Cotsell.
"Despite the falls seen across all types of buyers in May, the value of new home loan commitments has still risen 18% over the past 12 months," Fiona Cotsell, ABS head of finance statistics— Australian Bureau of Statistics (@ABSStats) Visit https://t.co/pZ7N5kUqBX pic.twitter.com/lgnzQTSvooJuly 8, 2024
Investor lending had been moving higher in most states and territories, with the biggest rises in NSW, Queensland and Western Australia.
"In May, the value of new loans to investors in Queensland reached an all-time high of $2.4 billion, exceeding Victoria for the third consecutive month," Ms Cotsell said.
"This is mainly due to investors taking out larger loans in the Sunshine State compared to this time last year."
The regional divide in property market performance was still playing out, Oxford Economics Australia senior economist Maree Kilroy said.
The mid-sized capitals - Perth, Adelaide and Brisbane - have been leading the pace of home price growth, which has been overall proved resilient to higher interest rates.
Loans to investors grew faster than lending to owner-occupiers in the year to May. (Diego Fedele/AAP PHOTOS)
"At the national level, we expect price momentum to temporarily fade in the back half of 2024," the economist said.
Yet interest rate cuts, likely in early 2025, along with ongoing housing shortages, would trigger an acceleration in home prices from then, Ms Kilroy said.
"However, housing affordability will place a limit on gains."
RateCity research director Sally Tindall said Australia's "Teflon property market" continues to rise despite higher interest rates, "dragging the average new loan size along for the ride".
The size of the average new owner-occupier mortgage in Australia is $626,055 nationally.
"It's astounding to think owner-occupiers are, on average, taking out larger loans than ever before despite the fact the cash rate is sitting at a 12-year high," she said.
The average new owner-occupier rate was sitting at 6.27 per cent, she said, with borrowers having to pass the banks' stress tests hovering at an average rate of 9.27 per cent.
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