Millennials in Australia are growing increasingly angry about being priced out of the housing market which could end up having a huge impact on the rest of the country, a leading UK expert has warned.

Unless public funds are put aside to provide more affordable housing for those aged between 20 and 35, we could see greater divisions in society, more youth support for extremist groups and damaging levels of alienation.

“I think in Australia you haven’t yet felt the anger that is coming from young people,” says Oona Goldsworthy, the chief executive of UK housing association United Communities, who is in Australia as part of a world tour studying Millennials’ housing.

“It can be nice and civil and well-behaved, or it can be quite difficult to contain, and you don’t know where it can go. It can lead to things like young people supporting extremist groups on the fringes of society if you’re not careful. If you don’t listen to young people’s voices, that can have a big impact on both the micro and macro levels.”

Ms Goldsworthy, who is also working with Grand Designs presenter Kevin McCloud on a landmark housing project in the UK, says the housing crisis disproportionally affects the young because they have no, or little, capital behind them, and fewer options.

In Australia, she sees that problem as particularly acute with Millennial home ownership levels among the lowest in the world, beaten only by the UAE, according to a recent global survey by the HSBC bank. Here, only 28 per cent of young Australians own their home, compared with the average around the world of 40 per cent.

“On an individual level this is very difficult for young people,” Ms Goldsworthy says. “But on a macro level it impacts on the success of our cities and economy, with Millennials making decisions to leave cities, delay families and fostering inequality and resentment between generations.

“In Britain, that was particularly recognised after the anger that followed the Grenfell disaster [when 71 people in a tower block in London died in a fire] which highlighted the social inequality and injustice of the housing market. A lot of people then realised the depth of the housing crisis – which isn’t solved by leaving it all to the private sector.”

Ms Goldsworthy will now be having meetings with local authorities and developers across Australia to discuss the issues, as well as academics working in development and housing policy, and community housing associations developing projects on the ground. She will also be speaking at a major Australian Housing and Urban Research Institute (AHURI) conference to start in Sydney on November 29.

She says some of the solutions to the problems could lie with expanding the ethical market rental sector, with many more affordable listings for property. Her project with Mr McCloud’s custom-build home company, Happiness Architecture Beauty (HAB), in Bristol in England, for instance, is to provide 160 homes that are evenly split between those for sale, those providing affordable housing and those for ethical market rental.

There are hopes, too, in Australia for more community land trusts being set up; non-profit corporations that own real estate to benefit the local community with housing and commercial spaces. There could also be more micro-homes produced as are being seen in Europe, and more mixed housing, like in Holland where elderly people and Millennials live side by side in the same projects.

“Millennials want the same thing as everyone else – somewhere they can put down roots, feel a sense of belonging, have safety and security, and not having to keep moving,” says Ms Goldsworthy.

“But the difference is that this generation are used to sharing, with the sharing economy and not necessarily owning things like vehicles. They want accessibility, but not necessarily ownership. So different typologies of housing like sharing spaces, co-housing, or having small bedrooms but sharing facilities with others, could suit them.”

Ms Goldsworthy’s visit to Holland ended up in a pilot project between a youth homelessness charity and a university converting shipping containers for homes. “I look around Sydney and I can see a lot of empty spaces where we could do this, although I prefer to call it ‘pop-up housing’,” she says.

“I can see old railways yards being redeveloped, space by the fish markets, there is lots of land that’s not being used that could become housing while we wait for longer-term developments to happen. You can do things like that quickly and cheaply.”

She says people outside Australia are shocked to hear we have a housing crisis, particularly when we have such a comparatively small population and such huge expenses of land.

But when they hear the statistics – that general home ownership fell from over 70 per cent in 2006 to 61 per cent in 2016, and that the private rental system has doubled over the same period – they are routinely stunned.

“That’s both a huge fall in ownership and huge rise in rentals over a short period,” she says. “They are really big movements. In Australia it’s because Baby Boomers are buying investment properties so Millennials can’t afford to get on the housing ladder.

“That’s a real intergenerational shift in expectations and a split in society between those who own property and those who have less and less hope of ever owning a home. It’s too early to tell what will happen if little continues to be done. But when you hear from young people that they don’t know what to do, and where to go, what happens with that anger?”

This story has been altered since original publication.