Housing affordability is likely to be an issue for at least 40 years, with the demand for new homes needing bold policy, a major new report says.

The report by the Committee for Economic Development of Australia, to be released on Tuesday, says policy needs to reflect the great Australian dream of owning a home is over for many people.

"What the CEDA report highlights is that ... the issue is far more complex and without changes now, could have longer-run consequences," CEDA chairman Rodney Maddock says in the report.

It finds a decline in interest rates and the end of credit rationing has caused housing prices to surge worldwide and the poorest will struggle to find homes.