The analysis combines Australian Bureau of Statistics figures for disposable income with data on housing and occupancy costs. The ABS assigns Australian households into five groups, known as quintiles, based on disposable income. Loading In 2018, the poorest fifth of Australian households spent 29 per cent of their gross incomes on housing costs. That burden has grown significantly over time - from 21.9 per cent in 1995 and 23.7 per cent in 2008. Meanwhile, the relative cost housing has barely changed for the richest fifth of Australian households. In 2018, this group spent 9.4 per cent of gross income on housing costs, compared with 9.3 per cent in 1995. Middle-income households - the third quintile - spent 16 per cent of gross income on housing costs in 2018. That was up from 13 per cent in 1995 and 15.1 per cent a decade ago.

Rachel Ong ViforJ, an economics professor at Curtin University, said if the trends continued more people in the lowest income group would fall further behind and struggle to pay rent or a mortgage. "When people are in mortgage or rental stress it affects their mental health," she said. "Another issue is that children who are growing up in households where the parents are poorer and more stressed are likely to find themselves in a situation [where it is] very difficult to get on an equal footing with children from higher income families.” The increased burden of housing fell disproportionately on people on lower incomes despite no substantial rise in income inequality between 2003-04 and 2015-16, the latest year for which are figures available. Over that time, the wealthiest households saw the biggest gains in disposable income at 36.5 per cent. For the rest of the country, income growth was between 27 and 30 per cent.

However, the Grattan analysis shows a different picture once housing costs are taken into account. Over the 12 years to 2016, Australian households' disposable income after housing costs grew by 16.2 per cent for the poorest households, compared to 20.6 per cent for middle-income households and 33 per cent for the wealthiest households. The gap between rich and poor also grew in terms of net wealth - the value of assets and savings held by households rather than income. The poorest households increased their net wealth 8.1 per cent, while the richest grew their wealth by 51.6 per cent. Mr Coates said the gap would widen because poorer, younger Australians who couldn't afford to buy a home were also less likely to inherit a property later in life. "Your probability of owning your own home as a wealthier younger person are a bit lower than what they were three decades ago but not that much lower, whereas your chances of owning your own home as a poorer younger Australians are much lower," Mr Coates said.