Home ownership for Australians under 40 dropped dramatically from a third to a quarter in just four years, a new survey released on Wednesday shows.

Latest figures show 31.2 per cent of 18 to 39 year olds owned a home in 2010, compared with 25.2 per cent in 2014, the Household, Income and Labour Dynamics in Australia (HILDA) Survey found. In 2002, 35.7 per cent owned a home.

And while six in every 100 people between the ages of 18 and 24 owned a home in 2002, this figure has now dropped to just two. And experts anticipate this trend will continue.

One clear reason why fewer people are making the plunge into buying their first home is surging real estate prices in east coast property markets.

By the end of 2002, Sydney’s median house price was $485,000 and by June 2017 it was $1.17 million. Melbourne’s house prices undertook a similar trajectory.

There is a growing sense that Gen Rent will remain so for a long time to come.Bill Randolph, UNSW.

And as the number of homeowners across the country dwindled, debt grew substantially for those who jumped into the market.

Since 2002, home debt has increased 174 per cent in nominal terms.

Those who were in negative equity – where they owe more than their home is worth – remained relatively steady at 3.9 per cent.

This could be one pressing reason younger Australians are foregoing home ownership, AMP Capital chief economist Shane Oliver said.

“People study for longer, get married later in life and are sceptical about the debt of home ownership their parents faced,” Dr Oliver said.

“It can be hard to disentangle what the cause [of fewer first-home buyers] is.”

He didn’t believe the rapid decline in home ownership was predominantly caused by a rise in property prices, instead pointing to these demographic trends as responsible for “about half” of the slowdown.

Yet First Home Buyers Australia co-founder Taj Singh said it was a clear sign of a “social crisis” caused by unaffordable housing markets.

“An entire generation not having reasonable access to capital-city housing can lead to a lot of them moving elsewhere,” Mr Singh said.

“Capital cities need youth and younger generations for a lot of the industries.”

He also warned people buying later in life would have to “work harder and longer … into their 70s, considering the high cost of housing and 30-year mortgage terms”.

University of NSW director of City Futures Research Centre Bill Randolph agreed the housing crisis was “deepening … with no obvious way out at present”.

“Coupled with poor job prospects for many, especially from the wrong side of the labour market, there is a growing sense that Gen Rent will remain so for a long time to come.”

This could create the social issue of a growing wealth divide between those who own real estate assets and those who do not – as indicated by Reserve Bank Governor Philip Lowe in July.

In 2010, 30.6 per cent of Sydneysiders aged 18 to 39 owned a home – a similar rate to that seen since 2002. By 2014, this fell to 19.7 per cent – continuing its run as the city where Gen X and Gen Y are least likely to own a home.

Melbourne came close, with a home ownership rate in the 18 to 39-year-old cohort at 21.3 per cent in 2014, while Brisbane had fallen to 29.8 per cent.

“Given that house price movements are likely to be a major driver of changes in home-ownership rates among people aged 18 to 39, it is valuable to probe further how changes in home ownership rates differ across Australia,” the report said.

Those who do manage to get a foot on to the first rung of the property ladder are facing their own set of challenges – higher debts than ever before.

“Home owners aged 18 to 39 are likely to be particularly susceptible to rising debt in an environment of rising house prices, since most are relatively new entrants to the housing market.”

Home ownership rates in the 2016 census fell to 62 per cent.