AUSTRALIANS are increasingly experiencing mortgage and rental stress and more people are waiting for public housing, research shows.

A report by the Australian Institute of Health and Welfare, to be released on Wednesday, paints a grim picture of Australian low-income earners' ability to cope with housing costs. It shows the number of households experiencing moderate mortgage stress, defined as when more than 30 per cent of gross household income is put towards housing costs, jumped from 900,000 in 1995 to more than 1.4 million in 2010. Those experiencing severe housing stress, where more than 50 per cent of a household's income is devoted to mortgage or rent rose from 300,000 to 460,000 - or 4.6 to 5.5 per cent - in the same time.

A report to be released on Wednesday paints a grim picture of Australian low-income earners' ability to cope with housing costs. Credit:Jessica Shapiro

Geoff Neideck, the institute's head of housing and homelessness, said the report showed more than 500,000 of the households experiencing housing stress were low-income earners.

''It's important to differentiate between those households on low incomes, because that would have a considerable impact on people's lifestyles and availability of income for other things … including necessities,'' he said.