ALMOST 12,000 Australians who took advantage of the ALP Government’s First Home Owner’s Grant are struggling to meet their mortgage repayments.

Adviser Fujitsu Consulting says 45 per cent of the 26,000 borrowers it surveyed, who had entered the market since mid 2008, were experiencing “mortgage stress” or “severe mortgage stress”.

Mortgage stress refers to a situation where a household spends a third of their income on home loan repayments.

The Real Estate Institute of Australia (REIA) has urged the Government to review the amount of the First Home Buyers Grant (FHOG) in its Pre-Budget Submission, so that it maintains its relativity to when it was introduced in 2000.

“We are calling on the Government to increase the FHOG to $15,000, for both new and established homes, and then index the grant to median house price movements annually”, said REIA President, Mr David Airey.

The phasing out of the First Home Owners Grant Boost and a range of other state government benefits could drive down lower-end house prices by as much as 10% in some markets according to a new analysis from CB Richard Ellis.

According to Erin Rolandsen, CBRE’s Manager of Residential Research, the May 2009 finance figures just released by the ABS confirm that the various stimulus measures to the housing market have evidently helped to increase sales activity.

The total number of dwellings purchased by owner occupiers was 29% higher in May 2009 than in October 2008 when the boost was introduced.