Investors continued their retreat from the Australian property market in April as lending declined.

The value of loans to investors fell a further 0.9 per cent in the month, after a steep 9 per cent drop in March.

While the value of loans to owner-occupiers edged higher by 0.2 per cent, the number of loan commitments fell by 1.4 per cent, seasonally-adjusted.

Lending standards are tightening as the fallout from the banking royal commission continues, and economists expect this to drag down loan commitments for some time to come.

"With more stringent assessments also likely to delay loan processing, finance approvals could see a more significant decline in the next few months," Westpac economist Matthew Hassan said.

New South Wales and Victoria have seen the sharpest declines in the share of borrowing by investors. ( Supplied: ANZ )

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The ABS figures show first home buyers account for about 18 per cent of the owner-occupier segment, but the number of loans to first-time buyers has fallen from its peak in November last year.

"The stamp duty discounts for first home buyers across New South Wales and Victoria are still assisting some buyers, but the effect is waning," ANZ's Daniel Gradwell said.

"While falling house prices are broadly positive for these buyers, further credit tightening is likely to weigh on the segment."

Auction activity continues to weaken

In another sign of the continuing cooling in the market, auction activity declined further over the week ending June 10.

Auction volumes fell substantially as most states and territories took a long weekend for the Queen's Birthday, according to preliminary data from CoreLogic.

"There were 900 homes taken to auction across the combined capital cities, down from 2,281 last week and 1,279 this time last year," CoreLogic said.

The preliminary auction clearance rate is 55.3 per cent, slightly up on last week's final clearance rate of 54.1 per cent.

Melbourne's preliminary clearance rate of 56.1 per cent is the weakest the city has seen since 2012.

It comes after CoreLogic figures showed Australia's property prices posting their first annual decline in six years in May, with Melbourne overtaking Sydney as the worst performing market over the past three months.