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New Zealand

Short Term Mortgages Stress Relief In Sight, But Long Term Trend Continues To Be Concerning - First Time Buyers Should Be More Conservative

Fujitsu Australia Limited

Sydney, March 31, 2009

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

Overall the number of Households experiencing Mortgage Stress fell 5.5% compared with February with 587,000 households in some degree of pain, compared with a peak of 900,000 in August 2008. Severe Stressed Households (those facing a potential sale or foreclosure) fell by 36%, thanks to lower interest rates and Government payments. 96,500 households still are at risk of having to sell up or loose their homes. Mild Stress rose by 6.2%, because of a rotation from Severe to Mild, and driven by lower income as overtime hours are reduced, and investment incomes fall.

Martin North, Managing Director, Fujitsu Consulting said "Falling Interest Rates and Government intervention has made a significant positive impact on Mortgage Stress. This is good news in the short term, and the additional Government Payments will reinforce this trend over the next couple of months”.

The factors driving stress have changed significantly. Falls in Interest Rates were 35% lower compared with June 2008, and the drop in the overall cost of living fell by 14%. This is offset by rising concerns relating to unemployment (up 15%), continued poor investment returns (up 15%) and lower incomes due to reduced hours (up 4.5%).

Mr North said "we still expect to see a significant rise in Mortgage Stress later in the year, as unemployment continues to bite. Recent interventions have definitely postponed the inevitable, but for example, if unemployment reached 7.5% by December 2009, this would translate into over 1.2 million households experiencing some degree of stress, of which over 460,000 would be close to the edge." Housing affordability in Australia remains considerably worse than in the UK or US with households highly leveraged into the property market.

The impact of stress on First Time Buyers was the subject of specific research this month. Today many first time buyers are still entering the market with small deposits, and are buying at inflated prices. This is of significant concern because they have very little protection against falling house prices and potential unemployment. "If unemployment were to rise to 7.5% by December, up to one third of the 125,000 First Time Buyers who entered the market in the last 12 months could find themselves in Mortgage Stress" warned Mr North. Young Growing Families would be particularly hard hit. It would be wise to ensure prospective purchasers had at least fifteen percent deposit to protect against this.

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

The full report is available via our website

About Fujitsu

Fujitsu is the leading Japanese information and communication technology (ICT) company offering a full range of technology products, solutions and services. Approximately 170,000 Fujitsu people support customers in more than 100 countries. We use our experience and the power of ICT to shape the future of society with our customers. Fujitsu Limited (TSE: 6702) reported consolidated revenues of 4.4 trillion yen (US$47 billion) for the fiscal year ended March 31, 2013.
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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 News and government organisations. Fujitsu Australia Limited and Fujitsu New Zealand Limited are wholly owned subsidiaries of Fujitsu Limited (TSE: 6702).
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Tracy Weller-McCormack

Phone: Phone: +61 2 9113 9225
Mobile: Mobile: +61 414 827 044
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Company:Fujitsu Australia and New Zealand
Marketing Manager

Date: 31 March, 2009
City: Sydney
Company: Fujitsu Australia Limited