The number of home loans to owner-occupiers fell from seven-year highs in January, falling 3.9% to 55,786 according to the Australian Bureau of Statistics.

The value of loans to investors fell 1.6% during the month, while the value of loans to owner-occupiers eased 4.3%.

The fall in the value of loans to owner-occupiers was greater than the 3% expected, but this could be attributed to the results falling in the holiday season, which can cause irregularities in the data.

The weaker-than-expected data goes some way to confirming predictions that tighter prudential controls and increases in supply are causing the housing market to moderate, rather than collapse.

Craig James, Chief Economist of CommSec, said "Despite the recent pullback, the home loan market remains in good shape - especially when you consider that loans to home owners eased from a seven-year high.

"Where the weakness is more paramount is in investor loans, which have fallen substantially over the past six months. The value of investor loans is now down almost 15% on a year ago.

"The result in a positive for the housing sector, given over-lending to the sector last year. More prudent lending policies should ensure that the housing sector continues to remain resilient, contrary to the discussion of a substantial downturn."