Canadian Home Prices at 1988 Levels … When Measured in Gold

While Canadian home prices have become less affordable in dollar terms, they have actually returned to 1988 levels when measured against gold, according to an analysis by Hanif Bayat, founder and CEO of personal finance company WOWA Leads Inc.

Bayat shared his findings on social media, saying: “Homes are becoming less affordable, but in terms of gold, Canadian home prices are at 1988 levels (7 kilos)!”

The analysis is supported by a graph showing Canada’s benchmark home price in Canadian dollars versus gold from Q1 1979 to Q2 2024. It shows that while Canadian home prices in CAD have increased dramatically since 1979, when priced in gold, they are currently at levels similar to 1988. This suggests that gold has retained its value relative to housing better than the Canadian dollar.

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Bayat argues that this discrepancy points to a deeper issue: the erosion of wage values due to inflation. He poses the question, “Why isn’t this accurately reflected in the inflation numbers?” and suggests three potential factors: underreported inflation, technology lowering essential costs, and home prices not being directly factored into the Consumer Price Index.

This perspective raises questions about how inflation is measured and reported in Canada, particularly concerning major expenses like housing. It suggests — to no one’s surprise — that official inflation figures may not fully capture the economic challenges faced by many Canadians.

Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.