The federal government is spending $6.8 billion each year to fix housing affordability for renters but the problem is getting worse, not better, according to Treasurer Scott Morrison.

And while the overall rate of home ownership in Australia fell from 71 per cent to 67 per cent between 2002 and 2014, young people are being hit hardest by soaring house prices in Sydney and Melbourne, in particular, and are being forced out of the housing market.

For 25 to 34 -year-olds in this period, home ownership rates fell by nearly 10 percentage points to less than 30 per cent and for 35 to 44-year-olds, it fell by more than 10 points to 52.4 per cent.

In a scene-setting pre-budget speech on Monday, Mr Morrison will argue that Labor's proposal to pare back negative gearing tax breaks will not help Australians looking to buy their first home – and it will drive up the cost of renting.