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by throw0101a
1737 days ago
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> The fact is that inflation has eroded away the value of $$ and houses that should cost $50,000 now cost $700k. There's a particular problem with that hypothesis: > Over the past 5 years, single-family home prices are up 150% in London-St. Thomas [Ontario], but down in Regina. They've barely budged in Edmonton. Monetary policy provides no explanation for that phenomenon. * https://twitter.com/MikePMoffatt/status/1430892821968392198 Meanwhile, when you increase the population, but do not have a corresponding increase in supply: * https://mikepmoffatt.medium.com/ontarians-on-the-move-2021-e... There's no need to get into hard money, gold bug tropes about asset prices when supply and demand effects can explain regional price rises. |
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In the short term effects other than those caused by monetary policy can be overwhelming (e.g., London-St.Thomas, has had a huge influx of people from Toronto over the last 5 years that would have driven up prices regardless of whatever the monetary policy may be). But this doesn't change the fact that the dollar has lost 95% of its purchasing power and that the average house price in the 1930s used to be 1X the average yearly salary, whereas now it's 12x.