Mortgage holders switched $1.2 billion worth of finance from investor loans to owner-occupier in November, according to the Reserve Bank of Australia.
The RBA's monthly financial aggregates, released on Friday, show housing credit growth continued to moderate in November, falling to 0.4 per cent from 0.5 per cent in October.
The RBA estimates that $61 billion of home loans have been switched to owner-occupier since July 2015, with investor lending increasingly constrained by the Australian Prudential Regulation Authority's intervention.
APRA has told lenders to limit annual growth in new investor lending to 10 per cent and, then this year, to limit higher risk interest-only loans to 30 per cent of new residential mortgages.
JP Morgan economist Tom Kennedy said APRA's measures - designed to reduce risk in the housing sector - were working.
"The November print marks the weakest monthly run rate since early 2016 and is a further indication that macro prudential measures are having the desired effect on lending behaviours," Mr Kennedy said.
Total private sector credit rose 0.5 per cent in November, with personal credit shrinking 0.2 per cent, but business credit grew by a better-than-expected 0.7 per cent.
CBA chief economist Craig James said the figures suggested the RBA had reason to be comfortable about the health of the financial system.
"Businesses seem to be finally embracing the low interest rates on offer at a time when housing lending is softening," Mr James said.
