The decreasing number of Australians who own their own homes means many people will need a higher superannuation balance to retire on in the years to come, according to REST Industry Super.

As a result, the planned superannuation guarantee (SG) increase to 12 per cent had become all the more critical, the fund said.

"Obviously people are not buying homes at the same rate," REST chief executive Damian Hill said.

"The impact on them means either they will be renters in retirement and so their retirement needs increase by the amount of rent they need to pay in retirement, or else if they do ultimately buy a home, and they are simple deferring, then it is more likely they still have a sizeable debt so they will still have to use some of their retirement assets to pay off that debt and be left with a lower retirement benefit than they on first instance think.

"Obviously the government policy from 9 to 12 per cent is increasingly important to try and address these needs. This trend is probably not as well understood as it needs to be."

Research commissioned by REST showed that in 15 years around 20 per cent of Australian might not own their own home, compared to 15 per cent now. In 25 to 35 years, this could increase to 25 per cent.

Home ownership was declining especially among those under 35, the research found.

"While some young Australians are consciously deciding not to purchase property, many others want to buy a home but are unable to because of the reduced affordability of housing, especially in the capital cities," Hill said.

"The problem with this is that so much financial advice and policy has been developed around the assumption that people will own their home when they retire. While home ownership has long been one of the key pillars of Australia's retirement income policy, it is certainly showing signs of crumbling."

He said financial planners, super funds and the government should make greater efforts in educating Australians about the impact of this trend on their retirement savings.