“The Economist tracks the health of housing in 26 markets around the world, encompassing a population of over 3 billion…The Economist’s housing index compares the path of house prices against two measures: rents and income. If house prices rapidly outpace either one, a bubble may be forming. According to our measure, property is more than 25% overvalued in seven of the markets we track, notably in Australia, Britain and Canada…
It is in Australia and Canada, however, where prices seem most out of kilter. They are 61% overvalued relative to rents in the former, and 89% in the latter.”
That makes Canadian housing the most over-valued in the world relative to rents and third behind Australian and Belgium relative to income. (see table on left)
See, Global housing markets: property puzzles and also Over-valued home prices put new owners at risk.
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