But the figure was still an increase on numbers in 2012 and 2013.
Gay, bisexual and other men who have sex with men (MSM) were the group most affected.
Of the 197 people diagnosed, 128 were MSM and 24 were heterosexually infected (similar number of men and women).
For most of the remainder, the means of infection was not reported. Only one person was infected through injecting drug use and two people had been infected through mother-to-child transmission overseas.
The reduction in the number of people diagnosed last year was in both MSM (128 compared with 164 in 2016) and heterosexual men and women (24 compared to 42 in 2016).
McAllister changes to the management of people with HIV may have helped prevent the disease.
HIV-infected individuals were now able to start treatment immediately on diagnosis as the the clinical threshold to get subsidised anti-retroviral therapy has been removed.
Pre-exposure prophylaxis are also now available to prevent infection for individuals at high risk of HIV.
"These new measures, along with use of condoms, regular and early HIV testing and screening and treatment for other sexually transmitted infections all need to be utilised in order to see a continued decline."
McAllister said it was important in light of availability of new prevention measures to monitor behavioural patterns that might be underlying changes in the number of people diagnosed.
It was also important that efforts continued to combat the stigma about HIV as thatdiscouraged testing and people were less receptive to health promotion messages, she said.