Investors appear to be slowing down on mortgages as the rental market reels under the impacts of the COVID-19 outbreak, CoreLogic's latest quarterly review showed.

Over the June quarter, the share of investors in the overall housing finance dropped to 25.4%, which is below the decade average of 36.3%. The total lending for investors during the quarter declined by 12.6%

"As rental markets remain subdued and property prices fall, this share may continue to decline," said Eliza Owen, head of residential research at CoreLogic.

First-home buyers took the space investors left, as they managed to increase their share of total owner-occupier commitments to 29.5%, higher than the ten-year average of 23.2%.

"The expansion of the First Home Loan Deposit Scheme and other first home buyer incentives announced over June and July is likely to see a boost in first home buyer participation over the second half of 2020," Owen said.

Despite the strong participation from first-home buyers, owner-occupier financing still fell by 9.9%.

While new housing finance moderated in the quarter, the CoreLogic report showed that refinancing reached a record high in the quarter. Since March, around $40bn worth of home loans has been externally refinanced.

The share of refinancing in the overall lending hit 43.3%, significantly up the historical average at 26%.

"The refinancing has been enabled by a record-low cash rate target of 0.25%, which is part of the comprehensive monetary response laid out by the RBA in mid-March. The actual cash rate has hovered well below the target. Since late April, the actual cash rate has fallen to around 13 to 14 basis points," Owen said.