Canadian housing prices approach the ozone layer

A survey of 56 countries by Frank Knight shows that world house prices rose more than 8 percent last year. Prices in eleven countries rose by double digits. (FT 5/6. P2)  Shortly after I read this, someone sent me a chart comparing US and Canadian housing prices.  After a slight tremor when the US cracked, Canadian house prices soon resumed their upward trend.  The high price of housing in Canada has long puzzled me.  It is, after all, the second largest country in the world by area and sparsely populated. 

 

For example, Yonge Street in Toronto, which extends north from Lake Erie toward the pole, was listed in the Guinness Book of World Records as the longest street in the world until it was displaced by the Pan American Highway, which runs from Alaska to Chile, in 1999.  Yonge Street is 1,178 miles in length.  It was built in the 1790’s and named after Sir George Yonge, the British Secretary of War at the time and, was designed so that the capital could be evacuated northward in the event of a US invasion. 

(Given the length of the road, the British were clearly contemplating a worst case scenario. -- The route’s straightness belies the legend that it was built by prisoners arrested for inebriation.)  One would think it possible to have a prestigious Yonge Street address fairly cheaply somewhere.  But prices are twice the US level.