South Australia first-homebuyer numbers continue to fall, with underlying activity from this group remaining subdued.

Latest ABS data reports that 497 first-homebuyer loans were approved over August, which was a reduction of 4.6 per cent over the 521 approved over July.

The August total was the lowest since May and well below the 557 approved over August last year.

A total of 3945 first-homebuyer loans have been approved over the first eight months of this year in South Australia compared to 4872 over the same period last year.

This is a steep fall of 927, or 18.3 per cent.

Although first-homebuyer lending activity fell, the average South Australian loan for this group increased by 6.1 per cent over August to $276,500 and was 13.6 per cent higher than the $243,300 reported over August last year.

Lending to first homebuyers in South Australia accounted for 12.7 per cent of all residential lending, excluding refinancing over August. This was an increase on the 12.0 per cent market share recorded over July and the highest market share reported since September 2014.

First-homebuyer loan-market share remains below the long-term average 14.5 per cent, although the gap is narrowing.

South Australia also recorded a sharp fall in investor lending over August, with the value of loans approved to this group down from $429.9 million to $406.6 million, a decrease of 5.4 per cent.

The value of investor lending in South Australia over the first eight months of this year, however, remains 14.8 per cent higher than that recorded over the same period in 2014.

Investor activity over August accounted for 37.7 per cent of all residential lending over the month, which is the lowest market share recorded since February 2014.

All states again recorded sharp decreases in investor lending over the month, following similar declines the previous month.

Action by banks to increase interest rates to investors at the direction of the regulatory authorities is clearly having an impact on investor activity nationally.

The ABS reported that the value of finance approved in South Australia for owner-occupier dwellings, excluding refinancing, was also down over August, falling by 4.6 per cent to $671.8 million.

The value of finance approved for total dwellings excluding refinancing in South Australia fell by 4.9 per cent over the month to $1.1 billion, the lowest result recorded since February.

Home lending over the first eight months of this year, however, remains 7.3 per cent higher than the value financed over the same period last year, although recent signs are for a weakening in growth.

– Dr Andrew Wilson is Domain Group senior economist. Twitter: @DocAndrewWilson