Demand for mortgages has shrunk to the lowest level in four years as 12-year high interest rates continue to disrupt dreams of home ownership.
Just 50,294 mortgages were granted in June, the lowest monthly number since June 2004, the Australian Bureau of Statistics said.
This was a seasonally-adjusted 3.7 per cent decline on May, the fifth successive monthly drop.
Economists had expected a 2.1 per cent decline in housing finance commitments for owner-occupiers in June.
Still, there is hope for cheaper loans ahead after the Reserve Bank of Australia (RBA) on Tuesday signalled there may be scope to cut interest rates in coming months given the extent of the economic slowdown.
Financial markets are fully pricing in the risk of a quarter percentage point rate cut in the RBA's 7.25 per cent cash rate at the September 2 central bank board meeting, and at least another one before Christmas.