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The number of Australian who refinance has increased sharply with the fall in home lending

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There has been a tremendous drop in home lending that has caused a large number of Australians to refinance their homes.  In May Australia has seen the biggest ever drop in home lending that was by an amount of 11.59%.

Due to the effect of this the Australian market dropped by an amount worth $2.15 billion. But as per the statement of the Australian Prime Minister, there is no need to worry.

In a statement, he said that it is not appropriate to make any assumption about the future of the Australian market. This is because the demand has always been more than the supply. And the good news is that the above statement is relevant to the markets which are hit the most by this pandemic. Since the demand has always been more than the supply in the Australian market, there is nothing to worry about this situation because this is the element that drives the real estate market.

In a statement from ABS, they said that though the home lending has gone down but the number of people who are refinancing all-time high right now. According to the report, the refinancing has increased by 29% in the April-May period and the rate of increment is 63.10% on year to year basis.

As per a research group from RateCity, the number refinancers have increased because all the home-owners minimized their expenses to save money as they thought it would get them in a stable financial condition.

It is being expected that there may be a slight rise in lending in the next few months but the situation of the market is far behind the recovery point.

According to Mr. Morrison, the housing market in Australia is resilient. And when most of the people were drawing money from their superannuation balance, they were doing so to use that money in their mortgages.

Meanwhile, the Australian banks have allowed their customers to defer their debt payments which is another great news. Such decisions will be more helpful in the coming years as compares to the time right now.

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