The crucial point is that the CPI inflation basket includes the price of housing—in other words, the price of the services that a house provides—not the price of a house.
Statistics Canada estimates the price of housing services by adding up the costs associated with home ownership: namely, mortgage interest, insurance, property taxes, depreciation and maintenance and repairs.14 Over the last two decades, the price of houses has risen on average more than twice as fast as the price of housing, at a rate of 6 percent versus 2.5 percent (Chart 7).