Ballooning house prices and rising interest rates have contributed to the seventh consecutive drop in home loans.
According to the Australian Bureau of Statistics, housing finance for owner-occupiers fell by a seasonally adjusted 1.8 per cent in April.
Just 47,669 loans were written, reflecting the smallest number in any month since March 2001.
However the news was not all bad. There was a glimmer of renewed interest from first-time homebuyers, making up 16.3 per cent of loans granted in April.
This compares with 15.9 per cent in March, but remains well below the record 28.5 per cent that was set in May 2009 and when the Federal Government's more generous housing grant was in play.