Australians are rushing into debt like never before, with young people increasingly overstretched, driven by spiralling property prices and low interest rates, new figures reveal.

Just under half of all households with a mortgage were over-indebted in 2015-16, the Australian Bureau of Statistics’ Household Income and Wealth survey has found, with younger people dramatically increasing their burden.

The ABS revealed that 62 per cent of households headed by those aged 25 to 34, and 51 per cent of 35-44 age-group households who held a property loan were over-indebted. Overall, the proportion of over-indebted households had climbed to 29 per cent of those carrying debt, up from 21 per cent in 2003-04.

On the spending front, Australians are shelling out a greater percentage of income on the basics of life. They made up 59 per cent of the spending budget compared to 56 per cent in 1984.

ABS chief economist Bruce Hockman said average household debt had risen to $169,000 in 2015-16, an increase of $75,000 on the 2003-04 average of $94,000. That is a rise of 79 per cent which is well above the inflation rate of 36 per cent over that time, and represents a significant rise in debt levels.

Stephen Anthony, chief economist with Industry Super Australia, said rising debt levels presented risk in the current environment.

“We’re going from a situation where the real costs of borrowing for housing is at its lowest for 50 years and now they’re starting to edge higher,” Dr Anthony said.

“It’s not a crisis but it’s a concern.”

“Around one-in-four households with debt – 27 per cent – had debt equal to three or more years’ worth of their disposable household income in 2015-16,” Mr Hockman said.

That figure is up slightly from 26 per cent two years earlier and 24 per cent a decade earlier.

“A further two per cent of households held debt equal to three-quarters or more of the value of their households’ assets. Based on either of these comparisons, around three-in-10 of households with a debt (29 per cent) in Australia are considered to be ‘over-indebted’.”

Sydney and Melbourne had the highest actual number of property owners who were over-indebted. In Sydney, average debt load for those the ABS sees as overstretched was $765,000, which was $269,000 more than the average $496,000 property debt of their Melbourne counterparts.

However, Perth won the title of Australia’s most leveraged city with 55 per cent of its property owners over-indebted and owing an average $574,000 per household in property debt. Perth has been hit by declining property prices as the mining boom ended.

Overall, the percentage of households in debt rose in the two years to June 2016 when 74 per cent were leveraged. Two years earlier the figure was 72 per cent, unchanged from 2005–06.

Despite flat wages and rising property prices, inequality in Australia actually declined 3 per cent in the 10 years to June 2016, the ABS found.

The survey highlighted the flat wage situation, showing that in the two years to June 2016 the average household income actually fell slightly, from $1026 a week to $1009 a week.

Australians are also getting wealthier despite the rise in debt. The average net worth for all Australian households in 2015-16 was $929,400, up 22 per cent from $835,300 in 2013–14.

However, the median figure, which takes out the undue statistical influence of high-flyers, is lower at $525,000, which is also up 22 per cent from two years earlier.

Rising property values, as expected, have been the driver of this. Total average property values increased to $626,700 in 2015-16 from $548,500 in 2013–14 and $433,500 in 2005-06, the ABS found.