Severe mortgage stress is set to push as many as 30,000 homes to be repossessd this year. The monthly Fujitsu Mortgage Stress report states that Australian households may struggle as unemployment rises.
Worryingly, first home buyers could be hardest hit with one third of the expected repossessions predicted to be people who have bought in the past year.
Westpac senior economist Matthew Hassan says rising unemployment will shock many households.
“It’s not going to be a major shock to the market but we will see higher mortgage stress and increased property sales as a result of these job losses,” Mr Hassan said.
The report just recently releases, estimates that 30,741 homes will be repossessed or subject to foreclosure, that 497,168 homeowners will be in “severe mortgage stress” by December.
Predictions that unemployment will hit at least 7 per cent by the end of the year is fuelling the speculation over mortgage stress.
However, the news is not all bad, with the Fujitsu Mortgage Stress report showing a substantial 41 per cent drop in the number of home owners at risk of sale or foreclosures. Numbers are down from 164,590 homes in February to 96,532 in March, due partly to lower interest rates and partly government stimulus packages.
Mortgage experts are advising anyone who is in mortgage stress to act quickly, and try to negotiate with their bank before it's too late.
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