>>I would bet that the reason housing prices have outpaced inflation is due almost entirely to the popularization of rent-seeking activities and real estate speculation (not including the relatively recent distortions due to late 1990s deregulations that led to CDS and other financial "innovations" created to derisk the asset class beyond what was rational).

We've got a heck of a housing bubble in Canada, and we don't have those fancy financial instruments. We have the CMHC, which shifts the risk of mortgage default from banks to the public, and an interest rate policy not unlike the US' ZIRP. Also, 2008's 0% down 40-year mortgages kind of propelled this thing into a frenzy.