A survey of Australians aged under 30 shows they are increasingly pessimistic about the prospect of buying their first home.

The survey of nearly 900 people, conducted by the Mortgage and Finance Association of Australia, showed more than half those questioned said they were shelving plans to buy their first home.

That is a 10 per cent increase on the last survey, which was conducted late last year.

The association's Phil Naylor says the scaling back of the first home owners grant is one of the main reasons for the trend.

"[Under the previous grant scheme] there were first home buyers actually getting into the market but that has now slowed down considerably," he said.

"So obviously the number of people who are saying they're having difficulties getting into the market has increased considerably."

The survey indicated that most people were concerned about carrying a large debt.

A third of those surveyed believed they would be locked out of the property market permanently and were expecting to be life-long renters.

"Because there's insufficient housing being developed that means rental housing as well, so it means rents will go up," Mr Naylor said.

"So you've got a double whammy for those people.

"They can't afford to get into the housing market because prices are too high [and they] will find it difficult in the rental market as well."