Backyards could soon be just a dream for young people in Melbourne and Sydney as a new report shows younger people could have difficulty upgrading from smaller dwellings to detached homes.

The report from the Australian Population Research Institute indicates a build-up of largely empty, detached houses, occupied by those aged over 45, is partly to blame.

The report said when 25-44 year old households start raising a family in the years to 2022, their "dwelling priority" will be a detached house.

However, it said during this decade, "there will be enormous growth in the number of households where the householder is aged 45 or more years".

These households will occupied by couples whose children have left home or singles where the partner has died or moved into care.

The report said a major consequence of this "ageing affect" will be "a large increase in the number of small households aged 45 plus who will be occupying mainly detached houses in both Sydney and Melbourne".

A 'serious housing crisis' for Sydney and Melbourne

Report co-author David McCloskey said there was a shortage of detached houses, yet there are millions of bedrooms going unused around Australia.

"There are about 4 million bedrooms in Australia that are unused according to the calculations, that's even allowing for a spare bedroom to have guests over," he said.

"This is a really serious report that we're going to have to have the Reserve Bank and others have a really close look at it, because the implications for both Melbourne and Sydney from what we've found are really, really very serious."

The research shows Melbourne will require an additional 355,000 homes by 2022 in order to keep up with projected demand.

Mr McCloskey said Sydney and Melbourne were facing a serious housing crisis.

He said the report had gone "right back to the basics" and found that the boom in apartment construction in Melbourne was misguided.

"Typically what people have done is just looked at the overall number of people per household and said 'therefore, all we need to do is move to have more apartments for example and that'll solve the problem," he said.

"Our report actually indicates an enormous miss match between supply and demand, if the current trajectory of approvals continue, by 2022, there will be 123,000 too many apartments in Melbourne.

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