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The problem with this theory is that almost nobody who lives in these cities is paying current prices for a home. A person in Vancouver or Toronto needs a top 1% income to buy a detached house. Almost everyone with a home can only afford it because they bought a long time ago. Almost every city is like this so “just move” isn’t a realistic option. People will continue living here because they either don’t have to care about the price (bought long ago, inheritance, love with family, etc) or because they’re a poor immigrant that’s happy to share a 1 bedroom apartment with 5 strangers for $600 a month

The average Vancouver house dweller makes 44k which is way lower than people in any other home type. People are buying houses with wealth, not income. It doesn’t matter what jobs pay.

[Retric]

Homeowners don’t as a rule directly set prices just as people holding stocks indefinitely don’t set stock prices. However there’s a constant stream of people dying etc which brings such homes onto the market and needs to be offset by people buying in.

Renters are different because they regularly sign a new lease and so very much do care about changes to the prices. Renters leave cities for many reasons, but high rent is a common one especially at retirement.