Sixty-eight per cent of Gen Xers worry they will be locked out of the property market and for many the prospect is taking an emotional toll, the latest ME Bank study shows.
The findings, which come from a study of 1000 "wannabe home owners", shows many Gen Xers who worry about never owning a home feel inadequate, humiliated, and as if they have nothing to look forward to.
In particular, 53% of Generation X respondents blame themselves and feel as if they've made bad decisions financially or with money management.
Study co-author Elizabeth Neal said negative emotions stemming from non-home ownership were understandable, adding that for many, home ownership is central to adulthood.
"The need for security is fundamental to the human condition and our sense of belonging," Neal said.
"It goes back to Maslow's hierarchy of needs - physical safety is the base need, followed by our social and emotional needs."
"Gen Xers are at the 'settling down' stage of their lives and security has become a higher priority. This generation grew up with the assumption that buying property is integral to becoming an adult."
Neal also found Gen Y was also feeling emotional pressure in relation to housing, noting the media, friends, family and social media all have a role to play in reminding first home buyers of their inadequacy.
"I'm not surprised half of Gen Y's who don't own a home feel the most envious or jealous when others get on the property ladder before them - Instagram and Facebook feeds are likely to be dotted with photos of acquaintances smiling proudly outside their first home," Neal said.
The study comes as the national debate rages over potential policy that would allow first home buyers to access superannuation savings for a home deposit. A stream of articles and opinions appear daily in the national press, and politicians are weighing in before the May budget.
The idea has been largely criticised by Australia's superannuation industry.
Despite the doom and gloom, the survey found that non-home ownership can have a silver lining, with some respondents saying that they feel liberated, and that they feel like they have the freedom to explore other opportunities and grow in other areas.
"Housing is unaffordable in many parts of the world but people continue to find other ways to invest their savings to build wealth for the future, like contributing more to superannuation or using the monthly savings they might have paid to a mortgage for another type of investment," ME head of home loans Patrick Nolan said.