> This is interesting, because (at least in America) the current rhetoric is that housing was laughably affordable up until the 70s(?).
I always find this a bit of a disappointing discussion, cherry picked to the extremes.
If we're being honest in talking about the cost of housing, we'd try to make apples to apples comparisons.
For example, if we used to eat apples that were 2 inches in diameter, lacked sweetness, had lots of seeds in them and started to rot after two days, and then 50 years later the average apple was tasty, 10 inches in diameter, seedless and juicy and lasted two weeks, you wouldn't necessarily conclude that because its price had doubled that apples have become more expensive.
But we kind of do that with housing.
Since 1969, homes have more than doubled in average size. Such homes were shared by 3.3 people, now by 2.5 (or 25% fewer people per house). And we used to pay 10% interest, now 5%.
So we have 2.6x as much square footage per person, and pay half the financing cost as we did before. And median nominal personal income tenfolded since the 60s. Of course you expect home prices to increase by a lot, it doesn't mean housing was laughably affordable and now isn't.
In fact there's quite a few studies which show that a unit of housing (e.g. the percentage of income spent on a square foot used by 1 person) has gotten cheaper. We just happen to consume more of it, and share it with fewer people, and pay less to finance price levels, which pushes the price levels to new heights without housing itself having become more expensive. [0]
If you then take into account the quality of housing and neighbourhoods, you see even the above is still an apples to oranges discussion. The amenities inside the home and in the neighbourhood are simply no comparison. I literally have a supercomputer allowing 3D simulations of any kind known to creativity on a screen with better quality than a 1970s movie theatre (I'm talking about a PS5 on a 4k screen) in my home. And I live in a town with 190 nationalities and as many kitchens within a 15 minute commute, just like parties with every denomination of music and dance, multiple universities and schools teaching just about any skill, shops selling just about any worldwide product I'd like. Of course all this access comes with a price because there was scarcely a place on earth like it 50 years ago, and now my city (Amsterdam) has many equivalents around the world, Lisbon being an example named in the thread's article. If you put our lifestyles and general wealth of pretty ordinary people like myself in these cities to the test of any city 50 years ago, you'd maybe find some of the very elite in NYC and London living like that, and that's it.
[0] https://www.forbes.com/sites/steveforbes/2021/06/25/us-housi... -- this isn't a proper study, but does substantiate some of the claims I made above. It's even missing some things (it overestimates principal paydown as a cost rather than a cashflow, and it doesn't account for quality differences).