Inflation is not uniform nor should it be...and real estate is all about location...relationship is not linear between population and re prices...dighn wrote: ↑Sep 11th, 2014 3:44 pmAll prices increase of course, but the devil is in the details. Take a look at metro vancouver for example (where I am), about 1.9 mil people in 2001, 2.3 mil now. You take that, and add in an annual inflation of 4%. You get maybe 70% increase. Very naive calculation of course, but still illustrative. Do those factors explain the almost 3x increase in RE prices during that time? Not really. There are other forces at play here, like low interest rates, changes in demographic (a shift in attitude toward home ownership), foreign investment (perhaps) etc. All I'm saying is that it's completely reasonable to think that current prices are unreasonably high and that the current generation is kind of getting screwed in this regard. Of course, it's just the market at play and it is what it is. Personally I earn pretty good money, and have sizable savings and investments. I feel pretty well off, until I look at the housing prices around here. I still a lot of people "affording" these houses by cutting expenses and renting out rooms and I just shake my head.
Simply put..supply of RE is finite..at least for low/med density products...moreover PPU has been decreasing putting more pressure on re market