A price-to-income gap is not a household payment
No. The long rise in house prices described by the Bank of Canada does not, by itself, mean every Canadian home became less affordable. On August 25, 2015, Lawrence L. Schembri told the Canadian Association for Business Economics in Kingston that real house prices in Canada and a set of similar economies showed no material upward trend from 1975 to 1995, then rose from the later 1990s through the day of the speech. Over that later stretch, prices increased faster than nominal personal disposable income. It is not a 2026 listing, a local rent, or the principal-and-interest payment on a mortgage already signed.
Continuing, in his wording, meant August 2015, unlike the Bank’s here-and-now Monetary Policy Report and Financial System Review. Checked on October 30, 2026, the remarks are historical, not a new price report.
Two country groups, one national price
The charts begin in 1975. One group is Canada with Australia, New Zealand, Norway and Sweden: small open economies with similar macro-policy frameworks that, Schembri said, did not have sizable house-price corrections after the global financial crisis. A second group did have significant and persistent post-crisis declines. The text does not name them.
Country paths differ, so local circumstances matter even when some movement is shared. From 1975 to 1995, real prices in both groups had no material upward trend. From the later 1990s, a generalized rise was still visible in August 2015, and real prices remained well above 1995 levels for almost all countries discussed. Real means adjusted for the broad price level, not merely a higher sticker. The supplied text does not print the chart values, so no percentage gain is available.
Schembri focused on owner-occupied housing, singles and multiples combined, and a composite price for existing houses at the national level. Rent, a new home on its own, land valued separately, and any one city sit outside that choice. The national series can rise while a particular payment does not.
Income grew, and prices grew faster
Since 1995, prices in Canada and those peers rose faster than nominal personal disposable income. Disposable income here means income after personal taxes, including transfers, and it is not inflation-adjusted or one paycheque. All five countries had solid income growth, strongest in Norway and Sweden. In the financial crisis, the same countries had house-price corrections. Price-to-income ratios fell for a time and then climbed again. A pause in the ratio is not the same as a sizable, persistent drop in real prices back toward the mid-1990s.
A higher price relative to income is one recognized affordability signal. The measured house absorbed more of the measured income stream. It is not a test of the monthly payment. That payment also depends on the interest rate, down payment, amortization, taxes, insurance and fees. None of those appears here as a Canadian retail quote.
Canada’s population did not accelerate with the peers
Four demand forces had, in his judgment, likely contributed since 1995: higher disposable incomes and lower long-term interest rates; population growth, migration, and shifts in age and family size; broader and more efficiently funded mortgage credit; and other influences, including the policy framework, international investment, preferences, and regulatory and tax changes. The extract gives none of them a weight.
Across 1975 to 2015, population growth was highest in Australia, Canada and New Zealand. Comparing 1975–1994 with 1995–2015, growth rose in every country in the set except Canada. Faster population growth, he said, could help explain prices outrunning income for most of these countries. It does not, on his own split, explain Canada through a post-1995 population acceleration.
Net migration did rise. It was highest in Australia and Canada over the full sample and increased importantly in all five countries in the second half. Extra migration can add housing demand even without faster overall population growth. It is not a count of new households or homes built. Growth among people aged about 25 to 75 declined in Australia, Canada and New Zealand, which Schembri links to the postwar baby boom moving from youth into middle age. That cohort still grew well above 1 percent in the three countries. The following sentence about Canada is cut off in the text used here.
The introduction says he will also cover supply and, later, financial stability and macroprudential housing policy, including its interaction with monetary policy. Those sections are not in the fetched remarks. A shortage, a tax rate or a policy setting cannot be inferred from the promise to discuss them.
User cost keeps the monthly question open
The framework is why a higher price is an incomplete affordability answer. Schembri described a house as both a consumption good and an asset. It provides housing services and, for many owners, is the largest store of wealth they hold. The choice to buy depends on the value of the services, the price, and user cost. User cost includes depreciation, maintenance and interest, minus expected price growth. Price itself is set by demand for housing services and the existing stock. Expected price gains enter that user cost, so shared shifts in rates, credit or population can move prices together across countries.
A higher price raises what must be financed if the down payment does not rise with it. A lower interest rate, listed as one likely reason prices rose, reduces the interest part of user cost at the same time. The remarks never net those effects for a Canadian buyer, and they never measure rent.
Watch whether price-to-income ratios, not prices alone, stayed high after August 2015; whether migration and the 25-to-75 population kept growing; and which rate is written on a mortgage a household can actually sign. The 2015 record shows real prices turning up after two flat decades and Canadian prices outrunning nominal disposable income, aside from a temporary crisis dip. That is a national, historical affordability warning. It is not today’s payment.