PARENTS may be soon be carving out adult “cubby houses” for their children forced by skyrocketing house prices to stay in the family home for longer, CoreLogic says.

According to a survey of more than 2000 Australians commissioned by the property research firm, nearly two thirds of those living at home can’t afford to move out, while more than one fifth still living in the family home expect to stay with their parents until they are at least 30.

CoreLogic chief executive Lisa Claes said this could see the rise of “cubby house syndrome”, whereby parents attempt to fashion independent living arrangements for their adult children inside the existing property.

“Protracted affordability pressures means the outlook is bleak for many young people who want to fly the nest, so parents and their offspring need to be increasingly resourceful and innovative in the way they approach this challenge,” Ms Claes said.

“On the plus side, parents may have space like a garage or rumpus room at their disposal, and with a little creativity, could make use of it to give young people some semblance of independence, even when they can’t afford to fly the nest completely. ‘Cubby houses’ could well be the new granny flats.

“If you’re not downsizing your property, freeing up equity and able to give your kids a helping hand that way, and then look at the land you have at your disposal. Extending your home outwards is another option. For frustrated millennials, it could be a happy medium between living at home with your parents and moving out to struggle street.”

A typical dwelling now costs 7.2 times the annual household income, up from 4.2 times 15 years ago. At the same time, it now takes one and a half years’ household income to save for a 20 per cent deposit, compared with 0.8 years 15 years ago, and servicing an 80 per cent loan now takes 38.8 per cent of household income, compared with 25.2 per cent in 2001.

Residential real estate is now by far the country’s largest asset class at $7 trillion, compared with $2.2 trillion in superannuation and $1.8 trillion in stocks. Around 70 per cent of household debt is housing related.

CoreLogic’s ‘Perceptions of Housing Affordability Survey’ “identifies how buying a home is becoming the privilege of high income earners”, with a growing proportion of younger generations staying at home to save for deposits.

“It captures the degree to which parents are being expected to assist their adult children in either saving for — or paying for — a home, and reveals how families with low incomes and or young children are becoming more vulnerable to mortgage stress,” writes Ms Claes.

The survey found that 62 per cent of Australians believe housing affordability is worse than a year ago, 89 per cent of non-homeowners believe it’s important to own a property, and 87 per cent were concerned they cannot afford to do so.

Saving for a deposit was perceived to be the biggest barrier, followed by stamp duty costs and the threat posed by foreign buyers.

It comes after a warning from Citi that house prices could fall by as much as 7 per cent over the next 18 months, following a similar warning from UBS that the housing market had peaked.

Data from CoreLogic showed Sydney price growth was flat in April and rose only slightly in Melbourne. The soft result came after dramatic capital gains in the second half of 2016 and first three months of 2017, which saw Sydney dwelling values surge 11.3 per cent and Melbourne 12.6 per cent.

frank.chung@news.com.au