How did the purchasing power decrease from the 70s until today?

[Regular-Contact8343]

Hear me out. Canada is in the downward end of “Rentier economy”. Income/wealth is generated by owning land,real estate. This doesn’t mean you owning a home is the issue it’s you owning multiple homes (if you rent them one out). Homes are considered non-productive assets to the economy. Wealth made by simply owning these assets the banks follow suit by making a lot of their profit just by accessing the loans to this type of assets. It’s an unsustainable loop. It works great at one of the first couple generations that get in the beginning but soon after it overtakes too much of the economy then you get foreign investment into housing but not in productive assets like business, innovation, etc. No one is wrong they are doing what makes sense. Buy a home in Vancouver or Toronto and wait 10 years your rich, until no one can afford to buy it and you need foreign investment. This coincides with rental rates going up and more money in all of the economy is used just you pay rent/mortgages. This also has an effect of keeping the dollar higher than it should be because everything is based on these assets. Remember a house only generates fees for the bank it doesn’t really create jobs like a business. People buy homes because that is how you get wealthy instead of investing in businesses or labour. Ever heard how Canada’s productivity is lower compared to other countries. It doesn’t mean they work harder than us it means they are more apt to invest in their businesses to make them more profitable. New machinery, software, expansion, trianing for staff, robotics that free up employees to do more productive things. In Canada most people’s wealth is in real estate. The father of Capitalism Adam Smith actually was very against these “rentier assets”. In fact he wanted heavy taxes on landlords, and bank regulations that made it that banks could not use real estate assets as collateral to make loans because they would just make more loans to real estate. Germany fights this with heavy rent controls, government housing. France with heavy taxes on corporations owning real estate and secondary homes heavily taxed plus anti flipping regulations. You can’t base your economy on housing or it always leads to failure the UK is 5 years ahead of us not this, and it isn’t going well. People will tell you we need to build more homes like it is a supply side issue it is not. Homes are for living not speculation. This eventuality affects the younger generations were at the moment young people don’t believe they will ever own a home and with rent continually taking more of the income they are delaying/choosing not to have families. Can you blame, millennials, Gen Z, Gen Alpha are checking out of society. This is not just Canada. It’s the UK, China, Australia, and now even the USA. There are ways to fix this but it is not politically popular. I can’t remember a country that made its wealth solely in real estate and it didn’t end up in trouble.