A recent inquiry into home ownership in Great Britain should serve as a warning to Canadians.
The two-year investigation, chaired by a former Conservative cabinet minister, found that home ownership among Britain's millennials is in crisis.
In many parts of the U.K., the ownership rate among 25- to 34-year-olds is half what it was in the 1980s, dropping from around 50 per cent to around 25 per cent. In outer London, only 16 per cent of millennials own their own home, down from 53 per cent among the same age group in 1984.
(And that's despite the fact that British homebuyers, much like their Canadian counterparts, are getting plenty of help from their parents with the down payment.)
Britain's millennials are spending more on housing, facing longer commutes and living in smaller spaces than their parents at the same age, the investigation found.
Watch: How much home can Canada's "peak millennials" afford? (Story continues below)
Policymakers in Canada should take note. The situation here is not nearly as dire, but with house prices soaring in many parts of the country over the past decade, Canada now runs the risk of seeing a similar phenomenon take place.
The 2016 census found that, for the first time in decades, Canada's homeownership rate is declining — albeit from record highs. The survey found 50.2 per cent of 30-year-olds owned their own home in 2016, down from 55 per cent among baby boomers a generation earlier.
That's a much more moderate decline than seen in Britain, but with housing costs where they are, things could get much worse in the coming years.
In fact, Canada's millennials appear to be up against an insurmountable financial wall.
A recent poll from CIBC found that more than three-quarters (76 per cent) of Canadian millennials who don't own a home essentially have no prospects of buying one. They have either not started to save, or haven't amassed even a quarter of the necessary down payment.
"Our survey reveals that few millennials are taking the necessary steps to make the move to homeownership," Grant Rasmussen, senior VP of mobile advice at CIBC, said in a statement.
It's not because they don't want to; the survey found 94 per cent of millennials who don't own have ambitions to buy. Simply put, they can't afford it.
In Toronto, the median house now costs 7.9 times the median household income, up from 5.9 times income just five years earlier. In Vancouver, the median home costs 12.6 times the median income, up from 9.5 times income five years earlier (an already very unaffordable level).
Even realtors are beginning to admit that, at these prices, millennials can no longer afford housing. Faced with a large decline in home sales in the early part of this year, Jill Oudil, the head of the Real Estate Board of Greater Vancouver, pointed to one major factor: Housing has become too expensive for buyers.
Bad for millennials, bad for Canada
The tougher new housing rules put in place by various governments -- though they are designed to improve affordability in the longer run -- aren't helping in the shorter run.
A Royal LePage study released in April found that millennial homebuyers lost 16.5 per cent of their buying power when the federal banking regulator, OSFI, introduced new mortgage "stress tests" at the start of the year.
That's a bad portent not just for this age group, who face the increasing prospect or being life-long renters, but for Canada as a whole, which is counting on millennial homebuyers to support our very real estate-dependent economy in the years ahead.
Earlier on HuffPost Canada:
The U.K. report makes some recommendations as to what to do about the problem. It suggests re-evaluating tax policy, so that younger people at a disadvantage in the housing market don't end up footing the bill for aging homeowners' retirements.
Rejigging taxes so that older people pay more would likely be a political minefield. But there may be another, more politically palatable approach: Focusing on improving the economic circumstances of young Canadians.
A recent Royal LePage survey found the average millennial earns roughly $38,000 a year, enough for a mortgage of just $206,000, or just more than a quarter of the average house price in Toronto.
Policies that help millennials find better economic opportunities may be the simplest way to avoid a British-style home ownership crisis in Canada — and the most beneficial for millennials themselves.
Also on HuffPost: