Monday , 5 December 2022

Canada Has 2nd Highest House Price-To-Income Ratio; USA Is #10

…The OECD house price-to-income ratio index…measuring an affordability fundamental, shows that Canada’s housing is severely overvalued…[with] the second fastest growing gap between home prices and incomes in the developed world….

The OECD Indexed House Price-To-Income Ratio For OECD countries. 2015 = 100.

Source: OECD

Canadian real estate prices have surged 41.9% faster than incomes…[since] 2015…[versus] 30.5% in the U.S… The Netherlands is the only advanced economy with a higher ratio than Canada…showing a massive leap in just six years…

Canada’s massive gap is partially due to the sheer length it has persisted. After central banks overstimulated markets in 2020, prices surged nearly everywhere. In contrast, Canada was flagged by the US Federal Reserve back in 2015 for housing exuberance. By 2016, the country’s real estate fit the criteria for a full real estate bubble. Home prices have been on a breakaway for almost half a decade, leading to an unreal gap. Experts warn the wider this gap gets, the more pain it will require to correct.

The above version of the original post by Stephen Punwasi (betterdwelling.com) was edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

 

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