How do wages (and thus shelter affordability) figure into these models? Is this simply captured in the inflation figure?
What about I recall hearing stories of the 1970s and earlier that it was harder to get a mortgage than today as banks were more risk-averse in lending to individuals.
I think your missing variable is population growth. The 1950 through 1970 are the peak years of a) the baby boom, and b) post-war immigration. Rental pricing is decided at the margin, and people needed ever-more space through those decades. And the stock of rental changes slowly, with a long delay. https://en.wikipedia.org/wiki/Population_of_Canada#/media/File:Canada_immigration_graph.png
How do wages (and thus shelter affordability) figure into these models? Is this simply captured in the inflation figure?
What about I recall hearing stories of the 1970s and earlier that it was harder to get a mortgage than today as banks were more risk-averse in lending to individuals.
I think your missing variable is population growth. The 1950 through 1970 are the peak years of a) the baby boom, and b) post-war immigration. Rental pricing is decided at the margin, and people needed ever-more space through those decades. And the stock of rental changes slowly, with a long delay. https://en.wikipedia.org/wiki/Population_of_Canada#/media/File:Canada_immigration_graph.png
"So if you were the central bank, how would you control a system like this?" Why the central bank?
They are not the ones in charge. They are not even the source of money.
https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis
Turns out interest rate hikes run into a fundamental problem with the accounting.
https://new-wayland.com/blog/interest-price-spiral/