A slump in new property loans has been linked to tighter regulations.

The Australian Bureau of Statistics says investor loans have dropped by 6.2 per cent over the month.

The dip comes in the wake of a tougher lending rules imposed this year, which are driving up the cost of new interest-only loans and slowing the flow of loans to investors.

The retreat of investors is making things easier for first home buyers who have taken a larger slice of the mortgage market in recent months.

First home buyers now account for 17.4 per cent of all new home loans, an increase also helped along by generous stamp duty discounts in New South Wales and Victoria.

The average size of first home buyer loans was reduced by $6,200 to $315,000, while the average mortgage rose $2,100 to $371,000 across the entire market.