Westpac says there are further signs that new mortgage rules are hurting the market.
It calculates that mortgage approvals fell 15% in October, compared to the same month last year.
The central bank's loan-to-value restrictions, which came into force on 1 October mean each bank can lend no more than 10% of its total mortgage book to people with deposits of less than 20%.
That effectively requires most borrowers to now have bigger deposits.
Senior economist at Westpac Felix Delbrook says the latest data shows the new rules are starting to have an effect on the mortgage market.
"Basically mortgage approvals held up until maybe the second week of October, this is bank mortgage approvals, and we have seen a bit of a drop off compared to what we might have seen in previous years."
He says a clearer picture is likely to emerge in the November figures.
Mr Delbrook says he expects the next quarterly survey of non-bank lending to show a pick up, as borrowers turn to alternative sources of funding.
