Rising unemployment is threatening to push more families towards mortgage stress this year and there are concerns that because of job losses more people will be in mortgage stress than were created by the rising interest rates of last year.
Leaked details reveal the International Monetary Fund is set to dramatically cut its growth forecasts. The IMF was reporting global growth of 2.2 per cent last November but now Reuters reports that is now expected to fall to 0.5 per cent , increasing Australia's chances of slipping into a recession.
While lower interest rates have made it easier for people to meet repayments, managing director of Fujitsu, Martin North is worried the rising unemployment rates will push more families into mortgage stress by the end of the year.
"For many, cost of living concerns have dissipated, thanks to falling rates and fuel prices. However, there is growing concern about the potential for rising unemployment to drive stress up again." Mr North said.
A survey by Fijitsu Consulting found the number of households in mortgage stress fell to 635,000 this month, from a peak of 883,000 in August, due to lower interest rates.
This number may rise to as many as 929,000 households by the middle of the year as rising unemployment causes financial strain on many households.
Fujitsu says mortgage stress occurs when homeowners are resorting to other means of keeping afloat such as borrowing more on credit cards, looking at refinancing, falling behind on repayments or being foreclosed on.
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