Home loan misery for 30,000 Aussies

Tuesday 24 March 2009

Article by Mozo

Some 30,000 people may have to hand back the keys to their property by December as they fail to make payments on their home loans, a new report is warning.

Revealed exclusively to news.com.au, the Fujitsu Mortgage Stress report warns that first-home buyers are going to be the most vulnerable in the home loan squeeze as unemployment looks likely to soar as the year moves ahead.

Westpac senior economist Matthew Hassan has warned that unemployment will hit eight per cent by December 2010, while the Fujitsu report expects the country to be in the grip of "severe mortgage stress" by the end of this year.

"For those that lose a job they have to fall back on savings – it gets difficult to keep up – some will be able to ride it out but for (many) it will be much more difficult," warned Hassan.

Yesterday (March 23rd), esteemed economist Professor Steve Keen told the Sunday Telegraph that Australia could be in for its own brand of the US subprime mortgage crisis as borrowers rush to snap up a new low-interest home loan after consecutive interest rate cuts from the Reserve Bank of Australia.

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