As mortgage stress rises across the country, more and more Australian families are reaching crunch point and having their homes repossessed. The aspirational suburbs of Sydney are among the hardest hit.

In the city's south-west, there are reports that working people are moving into homeless shelters because they have failed to meet their loan repayments.

Home repossessions for 2008 are already at record highs and are expected to increase further through the year.

Bankstown in Sydney's south-west was once famous as a suburb of the Aussie battler. More recently, it has become known as a multicultural melting pot and a home to aspirational Australians.

But according to the suburb's federal member, Labor's Jason Clare, it is now the nation's capital for home repossessions.

Mr Clare says his electorate of Blaxland is the canary in the coal mine of the nation's housing stress.

"We know that last year 300 families lost their homes in the electorate and 300 families lost their homes the year before that as well," he said.

"The terrifying information we're getting from the Sheriff's Office is that repossessions have doubled in the last six months and instead of repossessing five houses a week, they're now repossessing three houses a day.

"I think the electorate of Blaxland is particularly vulnerable because the average income is lower than the average Australian income, but the average mortgage repayment is higher than the national income.

"Sydney is an expensive place to live, whether you live in Bankstown or Vaucluse.

"When the average income in the area is lower than the national average, it's always going to very tough to make repayments and every interest rate increase makes it harder."

Mr Clare says that often, people rely on the goodwill of family and freinds.

"They end up competing in an already tight and expensive rental market. We know that in Bankstown for example, that the vacancy rate for rental accommodation is less than 1 per cent," he said.

"That means the price of rental accommodation keeps going up and up. And some people rely on the assistance of shelters.

"I know of one gentleman at the men's refuge in Bankstown who has a job and is living in a men's refuge just to save up enough money to get a rental bond."

Emergency shelter

A spokesman for the New South Wales Department of Housing says there has only been a minimal increase in the number of people seeking emergency temporary housing as a result of having their homes repossessed.

Mr Clare says many people losing their homes now have never been in the situation before, and are not informed about what emergency housing is available.

That is a view echoed by the Consumer Credit Legal Centre of New South Wales.

Principal solicitor Katherine Lane says the centre has received more than 100 calls for help this year from people facing the repossession of their homes, a sharp increase on previous years.

"Originally the people who were facing it were the working poor, the people who were already under financial stress, who had just bought properties and were having difficulty with negative equity," she said.

"Now, we're seeing it across the board, all suburbs. There's a whole heap of people now across all middle-class, even some of the people who traditionally would have no problems whatsoever are now having mortgage stress.

"A lot of people ring us when the Sheriff is at the door, and that is way too late.

"It really is important that people swallow their pride, realise that they're in a big bucket of people who have got the same problems, and get advice as early as possible because that can be the difference between losing your home or not."

ABC Online March 27th 2008