Foreign investment in the finance and insurance sector has dropped, according to new reports.

The Foreign Investment Review Board 2013-14 Annual Report shows a decline of more than $AU1.2 billion.

In the 2013-14 year, just 22 proposals were approved in the finance and insurance sector.

Thirty-six proposals were approved in the same sector the year before, seeing proposed investment decrease from $2.9 billion to $1.7 billion.

The United States remains the largest investor in Australia’s finance and insurance sector, putting in $1.25 billion in 2013-2014.

The report says a total of 25,005 applications for foreign investment approval were considered in 2013-2014.

Of these, 24,102 were approved, 719 were withdrawn 181 were deemed exempt, and just three were rejected.

The real estate sector saw the greatest share of approvals, with 23,428 approvals in 2013‑14, almost twice the 12,025 approvals in 2012‑13.

The value of real estate investment approvals in 2013-14 was $74.6 billion, up by $22.7 from billion from 2012-13.

Foreign investment from China hit $27.7 billion, leading it to overtake the United States, at $17.5 billion, for the first time.

Other major source countries investing in Australia in 2013-14 were; Canada ($15.4 billion), Malaysia ($7.2 billion) and Singapore ($7.1 billion).