The number of households suffering mortgage stress could eclipse one million by June next year as rising unemployment levels and interest rates take their toll on Australian families, according to Fujitsu Consulting.
Fujitsu recently released their Mortgage Stress-O-Meter for June 2009 which said that mortgage stress was at its worst in August last year when 900,000 families were under pressure to meet repayments.
Mortgage stress is traditionally defined as households with 30 per cent or more of their income used to pay the mortgage.
According to Fujitsu, the number of households experiencing mortgage stress fell by 1.1 per cent in June to 538,000.
However, severely stressed households (those facing a potential sale or foreclosure) rose by 6.6 per cent because the short term relief experienced though recent cash stimulus packages has started to weaken.
Moreover, 111,000 households are still at risk of having to sell or lose their homes due to higher unemployment levels.
Fujitsu Consulting managing director Martin North said rising unemployment levels and lower income from working reduced hours would continue to have a crippling effect on Australian households.
“While we have reduced our unemployment forecast to peak at 7.5 per cent, we think interest rates will rise soon and more sharply than people expect as the threats from the global financial crisis abate,” Mr North said.