Australian home loan approvals dropped in August by 3.9 percent as first home buyers exit the market, according to official figures released on Monday.

The Australian Bureau of Statistics (ABS) reported the number of owner occupied housing finance commitments fell to 49,912 in August, from 51,927 in July.

Total value of dwelling finance commitments fell 1.2 percent in August, seasonally adjusted, to 23.84 billion AU dollars (22.57 billion US dollars).

Economists had expected the number of housing finance commitments to fall 2.5 percent in August.

Swiss investment bank USeconomist George Tharenou said the decline in August was a reflection of the election uncertainty over the past few months.

"But ... post the election there's been a material improvement in confidence, and I think that will be true too for the home loans market, where we'll see a further acceleration in lending over the next few months because we have record low interest rates as the key driver," he told the Australian Broadcasting Corporation.