Recent statistics show that the only segment posting an increase in mortgage applications is first-home buyers.
Owner-occupier upgraders and investors appear to be taking a more cautious approach as the market eases.
In June 2018, as a share of all owner occupier housing finance commitments, first home buyers accounted for 18.1 per cent which was their greatest share since October 2012.
Not only are more borrowing, they are borrowing more. In June 2018 the average loan size for a first home buyer was $349,800 which was both an historic high and 10.1 per cent higher year-on-year.
By comparison, the average loan size for a non-first home buyer owner occupier was $406,900 but up by a lower 5.5 per cent over the past year.
Property market analysts Core Logic said that with dwelling values declining, it is concerning that buyers that typically have relatively little equity are entering a declining market and increasingly borrowing larger sums to enter the market.
With value declining they run a significant risk of seeing their overall wealth decline as housing values trend lower.
However prices in cheaper suburbs favoured by first-home buyers tend to be holding strong while overall capital city medians weaken.
First-home buyer incentives such as state-based stamp duty discount and exemptions, and the federal first-home buyer Super Saver Scheme now combine with improved mortgage rates for owner-occupiers also provide a boost for first-home buyers.