According to market researchers Fujitsu, economic stimulus efforts by the government are helping borrowers manage their mortgage repayments.
According to its April 2009 Mortgage Stress-O-Meter, the number of households experiencing mortgage stress fell 2.8% compared with March 2009, with 568,000 households in some degree of pain, compared with a peak of 900,000 in August 2008.
Severely stressed households (those facing a potential sale or foreclosure) rose by 3%, despite lower interest rates and government payments. At least 101,000 households are still at risk of having to sell up or lose their homes thanks to higher unemployment levels. Mild stress fell by 4.9%, thanks to the second round of stimulus payments.
Martin North, managing director of Fujitsu Consulting said, "The additional Government intervention makes a significant positive impact on mortgage stress and this will continue for a couple more months. Beyond this it is looking more difficult."
According to Fujitsu, falling investment returns are severely impacting some households, especially at the more affluent end of the market.
"Falling income from bank deposit accounts and superannuation is stoking Affluent Stress," North said.
The problem for most remains the threat of unemployment. North said the stimulus packages would not stop more households from slipping into stress later in the year, as unemployment continues to bite. He said if unemployment reached 7.5% by December 2009, this would translate into over 1.2 million households experiencing some degree of stress, "of which nearly 400,000 would be close to the edge".
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