The Australian Housing and Urban Research Institute Ltd (AHURI) has released a report on how young people are saving for home ownership, which has been declining over the past 20 years due to rising house prices and the cost of living.

After surveying young adults in Sydney and Perth, the report found that 25-34 year olds are unlikely to be able to save enough for a deposit independently.

"The ability to access this family support was identified as the biggest factor in supporting entry into housing.

The ability to access this family support was identified as the biggest factor in supporting entry into home ownership," the report states.

"The majority of new or aspiring homeowners in this study had received one or more types of parental support.

"In the Sydney cohort, family support was an important component of the homeownership transition in all cases, in the context of the most expensive housing market."

Around 40 per cent of 25-34 year olds surveyed expected to "rely on the bank of mum and dad to make their dream of home ownership a reality".

"For young people living in Sydney, family support is crucial for those who have already bought a home," said the study's lead author, Dr Lawrence Troy of the University of Sydney.

One of the main issues identified was that young people's incomes were not stable enough when it came to saving for a deposit of $220,000 towards the average house price in Sydney.

"One of the most important savings strategies that emerged was living with parents or in a property owned by parents," Dr Troy said.

"This means little or no rent, utilities and food, as well as reduced spending on all the major necessity categories. As a result, people can plan better and have a larger share of their income

can be diverted to savings."

However, he said those without a family support network "risk being locked out of home ownership altogether".

"and by extension to the important wealth-building dimension that housing provides, particularly in retirement," Dr Troy said.

The lack of savings was also highlighted in the report, with 74 per cent of young people saying they had more than $5,000 in savings and that their weekly splurge had been cut out.

"Young adults are actively using strategies that support savings, such as minimising discretionary spending and paying utility bills in advance," said Dr Troy.

"They don't spend much on eating out, going out or going on holiday, and the most common savings strategies are cooking at home - including meals that rely on two-minute noodles - and spending less on clothing and household items.

"In contrast, young adults focus on paying for recurring items such as food, gas and debt, with the biggest challenges being large irregular and often unexpected expenses such as car repairs and professional insurance."