The total value of new investor lending dropped by 42% in December since the peak in early 2017, according to new data from the Australian Bureau of Statistics (ABS).

“The latest data now gives us a clearer picture of investor appetite for property, as this series excludes investors merely refinancing their existing loans. Combined, the slowing in demand from both owner-occupiers and investors reinforces weaker consumer confidence in the property market and confirms the slowing is across the board – not just among investors but also upgraders and first-home buyers,” said Robert Mellor, managing director of BIS Oxford Economics.

The seasonally adjusted national number of owner-occupier loans (excluding refinancing) also dipped by a sizeable 8% during the month, while loans for established dwellings declined by 10%, as reflected in weaker property turnover seen across major cities, according to Mellor.

“The slowdown in lending for owner-occupier dwellings is more recent, with falls concentrated in the last half of 2018," ABS Chief Economist Bruce Hockman said.

In seasonally adjusted terms, the value of lending for owner-occupier dwellings, excluding refinancing, fell in New South Wales (-6.1%), Victoria (-6.6%), Queensland (-9.9%), Western Australia (-6.3%), the Australian Capital Territory (-4.9%), Northern Territory (-18.3%), and South Australia (-1%). Tasmania, on the other hand, was the only state to buck the trend —up 4.2% during the month.

Overall, the value of lending commitments to households fell 4.4% in December, driven by significant drops in the value of lending for owner-occupier dwellings and investment dwellings.