Those who receive a gift of $5000 or more from a parent are much more likely to own a home than others. But the trend for parents to give their children handouts to help break into the property market is increasing the level of wealth inequality.

New modelling by economists from Sydney University and RMIT University shows about one in 20 Australians receive funds from their parents specifically for home ownership each year.

These "inter vivos transfers" - made during a parent's lifetime – were found to have "large impacts" on home ownership rates.

Parental gifts of $5000 or more lifted the home ownership rates of beneficiaries aged between 25-65 years by 14 percentage points compared to the rate that would be achieved had no transfer been received. The effect of parental gifts on ownership rates among those aged under 45 was even more pronounced.