experiences during and after the global financial crisis. 1 in particular, they did not have sizable post - crisis corrections in house prices. although these economies were not at the centre of the crisis, they were severely affected by it and the subsequent recession. they did not experience significant bank failures so the normal channels of mortgage finance continued to operate. banks in these jurisdictions typically draw on external sources for some of their funding. during the peak of the crisis, these sources largely dried up and banks received temporary liquidity support from public sources. in canada, for example, the federal government implemented the insured mortgage purchase program in 2009. bis central bankers ’ speeches for comparison purposes, chart 1b shows a second set of advanced economies that did experience significant and persistent post - crisis declines in house prices. 2 three points about these charts. first, there are notable variations across countries. while there is some common movement, local circumstances clearly matter. second, broadly speaking, real house prices across both sets of countries experienced no material upward trend from 1975 to 1995. third, a generalized upward movement in house prices began in the second half of the 1990s and is continuing today, even after post - crisis corrections. real prices remain well above 1995 levels for almost all countries. these trends suggest that there are common factors at the global level or simultaneously in each country that have arisen over the past 20 years and have pushed up real house prices. understanding these common and idiosyncratic determinants of house prices is important for both macroeconomic outcomes and financial stability and thus the conduct of monetary and macroprudential policies. a framework for analyzing house price trends to analyze these trends, let ’ s start with some basics. a house is simultaneously both a consumption good and an asset. it delivers a stream of non - financial housing services and, at the same time, is also a store of wealth. for most of us, it is the largest asset we own. a household ’ s decision to purchase a house depends on the utility of the services it provides, its price, and its ongoing user cost. the user cost includes depreciation, maintenance and interest costs, less the expected price growth. in the housing market, the price is determined by the total demand for housing services and the stock of houses. the equilibrium house price thus depends on the user cost, which includes the expected price appreciation, and this, in turn, depends on the expected evolution of demand and supply factors. to complicate matters, a number

of other dimensions influence the choice of the data being analyzed : • housing can be owner - occupied or rented. • housing units can be single - family houses or multiple - unit dwellings. • housing is a composite good consisting of both a structure and land. • housing prices can be for existing or new houses, or both. for my purposes today, i ’ ll focus primarily on owner - occupied houses, the total of singles and multiples and the composite price for existing houses measured at the national level. 3 these house price measures are indexes, not levels, rebased from the real house price database of the federal reserve bank of dallas, with the average of each country ’ s index for 2005 representing 100. the charts show house price movements for individual countries relative to their average over the period from 1975 to the first quarter of 2015. because of these multiple dimensions, as well as regional influences within a country, housing and house prices are intrinsically heterogeneous. therefore, price measures are necessarily indexes. the sp / caseshiller city - level indexes of repeated sales control for quality, but their availability is limited to a few jurisdictions. in canada, the equivalent to the case - shiller is the teranet / national bank composite house price index. the bank of canada uses this index and the canadian real estate association mls home price index, as well as the mls average for monitoring purposes. these three price indexes have exhibited the same upward trend. bis central bankers ’ speeches demand factors four broad sets of demand factors have likely contributed to rising real house prices across advanced economies since 1995 : • macroeconomic – rising disposable incomes and lower long - term interest rates ; • demographic – population growth, driven in part by migration, and shifts in age structure and family size ; • credit conditions – broader access to and more efficient funding of mortgage credit due to financial liberalization and innovation ; and • other factors – improvements to the macro - policy framework, international investment, preference shifts and regulatory and tax changes. house prices and income first, let ’ s look at house prices and income. since 1995, house prices in canada and the set of comparable countries have increased faster than nominal personal disposable income ( chart 2a ). 4 during this period, all of these countries experienced solid income growth, with the strongest growth in norway and sweden ( chart 2b ). during the global financial crisis, these countries also experienced house price corrections. this caused the ratios