Although first home buyer activity has waned recently, levels remain strong - but the outlook nonetheless is problematic for realising the Great Australian Dream.
Despite the monthly fall, 16,167 first home buyer loans were approved over the month, the second highest result since June 2009.
Lending to first home buyers has surged by 68.3% over the first two months of this year compared to the same period last year.
The February decline in first home buyer lending, largely reflected a sharp fall in VIC where activity was down by 5.2% with all other states reporting monthly increases.
VIC however remained the top performer for first home buyer loans with 4,142 approved over the month, followed by QLD 3,078, NSW 2,747, WA 2,362 and SA 972.
NSW however remains clearly the most expensive state for first home buyers with an average loan over February of $497,925 followed by VIC $442,805, QLD $379,597, WA $372,947 and SA $335,802.
First home buyer activity remains at the highest levels since the record-breaking period in 2009 courtesy of low interest rates, a reviving economy and various government stimulus policies direct to the group.
With home prices now rising sharply in booming housing markets and government policy initiatives expired or diminishing, the likelihood of continuing strong first home buyer activity is quickly declining.