Thank you for your question.
We try to look at what could be driving the increases in house prices. One area people usually look to when looking at the demand for housing is household formation, so the demographic factor. Not only do people need somewhere to live, but they also need somewhere to live if there's.... As the population grows or people turn the age where they normally leave their parents' house, there's greater demand for housing. We also looked at the supply.
Looking at the increase in population, we found that there's an increase in population that's occurred. There's been a faster increase in population since 2015, but the building of new housing, be they apartments or houses, has not kept up with that pace in demographic pressure. That's very likely a determining factor in increasing house prices.
The other aspect is whether individuals and households have more money to spend on housing, and that is indeed the case. The incomes of Canadians have increased over the last several years. At the same time, interest rates have gone down. For a household looking at what they can afford, the interest rate is a big determining factor in deciding whether to go for a house of a certain price or not, because the monthly payments they can afford vary according to the interest rate.
We had a confluence of events—rising incomes, lower interest rates and demographic pressure that has not been matched by an increase in the supply—and that's what has led, in many areas of the country, to the increases in house prices.