The impact of the federal government's roll back of the first home owners boost has affected Western Australia the most, where mortgage volumes slumped 35.5 per cent in October, new figures show.
The Australian Finance Group mortgage index showed the national volume of home loans advanced to first home buyers fell from $489 million in September to $357 million in October.
The decline contributed to an overall 11.5 per cent decrease in the total volume of mortgages arranged by AFG to $2.6 billion in October.
"Most people were expecting a fall in first home buyer activity, so the decline, in itself, comes as no surprise," AFG general manager of sales and operations Mark Hewitt said.
"But the fact that the rate rise cycle kicked in at the same time delivers something of a double-whammy.
"With the second rate rise announced last week we're expecting that there will be continued caution on the part of buyers."
The decline of first home buyers was strongest in WA with the buyers representing 12.5 per cent of mortgages sold in WA in October, down from 16.7 per cent in the previous month.
The total amount of mortgages sold in the state dropped 17.4 per cent to $516 million.
Meantime, the average mortgage size in WA increased from $391,000 to $399,000, the second highest in the nation behind New South Wales which reached $415,602.
