There are further signs of normalisation in the housing market with demand for owner-occupier mortgages rising and interest from investors in decline.
There was even a minor pick-up in the proportion of first home buyers taking out a loan in May, and while still low on a historical basis, at 14 per cent it was the highest amount in two years.
Commonwealth Securities chief economist Craig James described Tuesday's housing finance data as the "right mix".
"More loans to budding homeowners and fewer loans to investors," he said.
The value of loans going to investors fell 1.4 per cent in May compared to the previous month, as new Australian Prudential Regulation Authority rules limiting "interest only" mortgages started to bite.
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In contrast, the value of owner-occupier loans rose 2.9 per cent, and could see further gains ahead, as stamp duty reductions in NSW and Victoria that started July 1 are taken into account.
There was also a jump in the proportion of fixed-rate loans granted in May to 17.3 per cent - the highest in four years - as borrowers locked in present low interest rates.
However, while most economists forecast the Reserve Bank has finished cutting interest rates, they do not expect the central bank to join the growing global trend of higher rates for a while yet.
National Australia Bank chief economist Alan Oster expects the Australian central bank could keep the cash rate at a record low 1.5 per cent as far out as mid-2019.
While he expects economic growth to rebound in the second half of this year after the weather disruptions in the first six months of 2017, the longer-term outlook could easily underperform the RBA's upbeat expectations as key growth drivers - LNG exports, commodity prices and housing construction - begin to fade.
NAB's latest monthly business survey showed conditions rose further in June to their highest level in almost a decade and confidence increased to well above the long-run average.
"We continue to be pleasantly surprised by just how upbeat the business sector is, given the context of a fairly beleaguered household sector that has been weighed down by limited wages growth and record levels of debt," Mr Oster said.
The latest weekly ANZ-Roy Morgan consumer confidence index fell 1.3 per cent, partly eroding the 2.4 per cent increase over the previous week.
David Plank, head of Australian economics at ANZ, said the index appears to have stabilised around its long-term average having recovered from a sharp fall in May.
"We believe the upside in sentiment will likely be capped, given soft wage growth, high levels of household debt and a slowdown in house price growth," he said.
