Economists say that while the headline figure masks a slowing economy it could mean borrowers will be spared another interest rate rise until the end of the year.
The Bureau of Statistics says mortgages for owner-occupied housing rose 1.9 per cent in May to 48 thousand 818 beating market expectations for a rise of one per cent for the month.
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First homebuyers made up 16 per cent of all home loans granted in May little more than half the proportion of a year ago whenrates were low and a more generous federal government housing grant was on offer.
The Reserve Bank's kept the key cash rate steady for the last two months after raising it six times since October.
