Total lending reached $8.4 billion, down from $10.4 billion in March, according to the latest Reserve Bank data.
The monthly total remains high by April standards – up on the $2.7 billion borrowed in April 2020 – but the significant month-on-month fall indicates the Government's housing reforms have begun to bite.
In late March, the Government announced radical reforms to subdue investor activity, with plans to phase out interest deductibility for landlords, and an extension of the bright-line test.
Investor lending accounted for much of the $2 billion drop, falling from $2.3 billion in March to $1.6 billion last month.
First home buyer activity remained flat in April, with FHBs borrowing $1.5 billion, down from $1.7 billion the month before.
The borrowing of other owner-occupiers fell by over $1 billion month-on-month, to $5.1 billion in April.
High LVR lending continued to ease after the reintroduction of loan-to-value ratio restrictions in March.
High LVR loans to investors — greater than 70% LVR — fell to $175 million, down from $307 million the month before.
While high LVR lending to first home buyers — above 80% LVR — fell to $566 million last month, down from $625 million in March.