Official data released showed 62,718 mortgages were granted in August, 0.6 per cent seasonally-adjusted decline from the previous month.
A downwardly-revised 2.2 per cent fall in demand for home loans in July ended nine straight months of growth.
First time home buyers were down for the month of August only making up 24.7 per cent of mortgages. This was down from a record 28.5 per cent in May.
The Federal Governments first home owners grant has been wound back to $10,500 for established homes and to $14,000 for new properties since October 1st.
RBA Governor Glenn Stevens stated that the boards view is that it is now time to gradually begin lessening the stimulus provided by monetary policy.