And almost half a million Australians will be plunged into severe mortgage stress as the credit crunch continues to hit.
One third of the expected repossessions will be of first time home buyers who bought in the last 12 months, the monthly Fujitsu Mortgage Stress report predicts.
The March report estimates that 30,741 homes will be repossessed or subject to foreclosure - where a lender takes control of a mortgaged property and holds a forced sale - and 497,168 homeowners will be in “severe mortgage stress” by December.
The forecasts are predicated on the unemployment rate - which is now 5.2 per cent - hitting 7.5 per cent by the end of the year.
The Federal Government projects the unemployment rate will rise to 7 per cent by mid-2010, meaning an extra 300,000 jobless.
Westpac senior economist Matthew Hassan expects unemployment to peak at 8 per cent by the end of next year.
"It’s not going to be at a major shock to the market but we will see higher mortgage stress and increased property sales as a result of these job losses,” Mr Hassan.
“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.”
Despite the dire prediction, the Fujitsu Mortgage Stress report shows a massive 41 per cent decline in the number of home owners facing potential sale or foreclosures from 164,590 homes in February to 96,532 in March due to Federal Government handouts and lower interest rates.
Sydney-based financial counsellor Dennis Borham said the number of home owners at risk of losing their property had increased this year.
"In the last three years I’ve had only four people (facing repossession), this year so far I’ve already seen 12,” Mr Borham said.
He said home owners should seek financial assistance early if they sense trouble ahead.
Mr Borham’s most recent case involved a father of two who was forced to leave his home after losing his job and failing to meet his repayments.
"He lost his job in October and didn’t apply for Centrelink because he thought he’d find work easily. The wife didn’t work, and four months later they were both still unemployed and left with a car loan, three maxed-out credit cards, and two young kids to feed on top of their mortgage.
"By the time they came to me he’d stopped answering his phone because there were so many people chasing him.”
After numerous letters from the bank, the family put their home on the market last month and are now living in a rental property.
