Fujitsu Australia Limited

Early Action Can Save Stressed Households Thousands - But Some Fixed Rate Holders are Locked in With No Way Out

Sydney, 23 April, 2009 — Fujitsu Australia and New Zealand, a leading service provider of business, information technology and communications solutions today released its April 2009 Mortgage Stress-O-Meter monthly update.

The number of households experiencing Mortgage Stress fell 2.8% compared with March 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, 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."

Falling investment returns (35% more people gave this reason compared with July 2008) are severely impacting some households, especially at the more affluent end of the market. A number of these households are falling into mild stress, which is a new experience for many professionals. "Falling income from bank deposit accounts and superannuation is stoking Affluent Stress," Mr North said.

The outlook remains gloomy. Mr North continued, "Unfortunately the stimulus packages will not stop more households from slipping into stress later in the year, as unemployment continues to bite. Whilst the recent interventions have definitely postponed the inevitable, if unemployment reaches 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."

This month, nearly 80% of households with fixed rate mortgages had considered refinancing, but a significant proportion did not ultimately make a change because of the penalty charges and fees which the bank would levy. Around 42% of households would have to pay $10,000 or more to switch, which made the proposition uneconomic, so many households are locked into higher rates until their fixed loans expire.

Those in stress and forced to sell will on average lose over 6% of their property value compared with a willing sale, and if a bank forecloses, vendors on average will lose over 13% compared with fair value. "This highlights the need for households to take early action if they are experiencing difficulty, rather than waiting for the bank to act on them," said Mr North. "Early action can save you thousands, so talk to your bank at the first sign of trouble," he said.

The next Stress-O-Meter release will be end May 2009.

The full report is available via our website here.

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About Fujitsu

Fujitsu is a leading provider of IT-based business solutions for the global marketplace. With approximately 175,000 employees supporting customers in 70 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.6 trillion yen (US$47 billion) for the fiscal year ended March 31, 2009.
For more information, please see: au.fujitsu.com

About Fujitsu Australia and New Zealand

Fujitsu Australia and New Zealand is a leading service provider of business, information technology and communications solutions. As the third largest ICT Company in the Australian and New Zealand marketplace, we partner with our customers to consult, design, build, operate and support business solutions. From strategic consulting to application and infrastructure solutions and services, Fujitsu Australia and New Zealand have earned a reputation as the single supplier of choice for leading corporate and government organisations. Fujitsu Australia Limited and Fujitsu New Zealand Limited are wholly owned subsidiaries of Fujitsu Limited (TSE: 6702).
For more information, please see: au.fujitsu.com

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