Australia's luck 'beginning to run out': Costello

Australia's longest-serving treasurer warns the country's luck is beginning to run out as wages fall and consumer pessimism grows.

Peter Costello says while Australia is "far" from recession, the economy was undergoing big changes, leaving people with a sense of uncertainty about the future.

"(Australia's) luck's beginning to run out," he told a property forum in Sydney on Wednesday.

"For the first time since the 1990s, per capita incomes have stabilised in Australia - they are no longer growing.

"Young people under 50 who have lived through a period of uninterrupted rising incomes are beginning to experience something that's different."

Consumers were "anxious" and had "stopped spending".

Real wages were falling and disposable incomes had "peaked", Mr Costello said.

The former Liberal treasurer pointed out that the household savings ratio was now 10 per cent, compared with the booming 1990s when people were spending all of their wealth.

"People have closed the credit card and opened a bank account," he said.