Yup. This is the same phenomenon in India as well - the salary is "high", so you can splurge on furniture, buy reasonably priced cars etc. much easier than earlier generations. But we cannot afford to buy the same house my parents lived in at our income level.
In the part of Maryland (USA) that I live in, quite a few areas are named after families who lived here in colonial times, and they were granted huge swaths of land. But a descendant from one of those families today can't reasonably expect an estate of hundreds of acres. There's just not enough land to go around with the size of today's population.
Obviously, that's taking it to the extreme, but the population of India has probably doubled since 1980 or so. I don't know your age or your parents' ages, but there are certainly far more people in India now than when your parents were your age, so it wouldn't make sense for an equivalent amount of wealth to buy an equivalent piece of real estate compared to previous generations.
This mostly makes sense if real estate is already fully utilised, but it isn't.
I can't speak to India, but there's a feeling broadly in North America of having "new development" and "expansion" over time. Cities are much, much larger now than they were 40 years ago, and people imagine that the new farm land subsumed and developed should be available for a similar price relative to income to what it was 'back then'.
The XXX-acre rural farmland wasn't as valuable as the same space in town when purchased as a lot, but now it holds as many homes as that downtown space used to. Is it worth the same today, relatively, as that space was then? No, they're both worth comparatively way, way more than they were.
I don't mean to suggest that scarcity isn't a part of the equation here, more that there are a lot complex factors involved, e.g. wage levels relative to inflation over time.
You're right of course, that it's more complex than just land scarcity. But I feel like people sometimes have this strange default sense that something is wrong if things don't stay the same. "My dad fixed diesel engines and provided for a family of 5, so I ought to be able to do the same thing". Well, your dad lived in a different time. You can't be a Holy Roman warrior anymore, and there's also a chance you might not be able to make a good career at being a diesel mechanic at this point.
Sort of like when you have kids and see them everyday, you only vaguely notice them growing up because the change from day-to-day is so subtle? But when the extended family visits once a year, they notice a huge change? The world is constantly changing like that...you might not notice that today is different from yesterday, but today is drastically different from when your parents were your age.
> The XXX-acre rural farmland wasn't as valuable as the same space in town when purchased as a lot, but now it holds as many homes as that downtown space used to. Is it worth the same today, relatively, as that space was then?
Yes, they are. It's hard to make a direct comparison, because falling interest rates have caused housing prices to go up, and as people have gained income they have chosen to buy much bigger houses. But the per square foot price of a median-sized new home has been stagnant at the $100-120 range (based on CPI) since 1973: https://donsnotes.com/financial/real-estate.html. And falling interest rates have meant that the monthly mortgage payment per square foot has actually gone down over that time.
Have you accounted for development induced appreciation? Perhaps a similar home further from the city center would be a more suiting comparison?
Anecdotally, in central New York housing prices have gained only modestly. The 2008 financial crisis didn't have a large effect on prices here either. But... development in central New York is near zero.
I think that the internet has eliminated the commute for a lot of service sector jobs. I think that a lot of jobs remain in the city center only because that's the way the older generation has always done it.
