Have homes gotten pricier – or has money lost its value?

analysis

In 1981, an average Canadian home cost around 4.5 kilograms in gold – roughly the same as today.

Home unaffordability has dominated Canadian headlines for the past decade as housing prices have increasingly outpaced average incomes. Toronto and Vancouver now rank among the least affordable cities in North America , with homes costing more than 10 times the average before-tax household income.

Many analysts point to red tape, zoning restrictions and foreign investment as the primary culprits. An often-overlooked factor is loose monetary policy, such as prolonged periods of low interest rates and other measures that increase liquidity, which influence Canadian home prices in three key ways.

First, the availability of cheap money fuels demand and drives prices higher . Seco