Tony Alexander's latest mortgage adviser survey found that a net 13% of advisers are seeing more first home buyers in the market, the lowest yet in the economist's survey.
Alexander ponders whether the drop is down to high prices deterring FHBs, or the impact of tighter LVR restrictions and credit conditions.
Investors are also showing less interest, according to the survey.
A net 11% of advisers reported they had seen more investors looking for advice, down from a net 20% in November. Like the FHB figures, the result is the lowest on record for the survey.
There were bright spots in the report, however.
Advisers noted that a rising net percentage of advisers said they felt banks were becoming more willing to lend.
A net 16% of advisers said banks were more wiling to lend this month, from 0% in November and October. A net 59% of advisers in June said banks had tightened up.
Alexander said the positive figures on bank lending were important because they signalled "that the focus of banks with regard to raising minimum deposit requirements is not on crimping credit availability, but on making sure the burst of borrowing activity underway does not produce a great number of individuals in dangerous debt situations".