Lending to households fell 4.4 per cent in December* according to the Australian Bureau of Statistics.
This followed a 2.4 per cent fall in November 2018.
Chief economist Bruce Hockman said large falls in the value of lending for owner occupier dwellings (-6.4 per cent) and investment dwellings (-4.6 per cent) drove the fall in lending commitments to households.
“The slowdown in lending for investor dwellings this month continues the steady decline over the past two years, with the value of new investor loan commitments down around 40 per cent from the peak at the start of 2017,” he said.
“The slowdown in lending for owner occupier dwellings is more recent, with falls concentrated in the last half of 2018.”
The value of lending for owner occupier dwellings excluding refinancing fell in NSW (-6.1 per cent), Vic (-6.6 per cent), Qld (-9.9 per cent), WA (-6.3 per cent), the ACT (-4.9 per cent), NT (-18.3 per cent) and SA (-1.0 per cent).
Tasmania recorded the only increase in December (4.2 per cent).
It was not just the value of loans that fell, in WA the number of loans to owner occupiers excluding refinancing dropped from 3651 in November to 3393, and was lower than the December 2017 figure of 3745.
The number of loans to first-home buyers was 1164, down from 1231 in November and 1333 the previous year.
First-home buyers as a proportion of the WA owner occupier market decreased slightly, 34.3 per cent in December 2018 compared to 35.6 a year ago.
The value of loans to first home-buyers in December was 7.1 per cent lower than the previous month and 14.6 per cent lower than 12 months previously.
Nationally the number of loans to owner occupier first-home buyers was down 12.6 per cent from December 2017.
While this reflects the broader trend of weaker lending activity, the fall was smaller than the fall in lending to owner occupier non-first-home buyers (-15.5 per cent) and followed strong growth in 2017.
The value of loans to WA investors also fell, down 8.34 per cent from November and was 38.44 per cent lower than the previous year.
*Figures used are seasonally adjusted.