Canadian Homes Third Most Overvalued in the World

Owning Your First HomeToday, the Organization for Economic Co-operation and Development (OECD) released data which ranks Canadian real estate as the third most overvalued out of 34 countries evaluated.

This jives with CREA’s April numbers which showed that housing prices were up 1.3% from April last year.

By comparing the price of an average home to how much it would rent for, and by comparing home prices to average national salaries, the OECD determined that Canadian real estate is overvalued by as much as 30 per cent.

Prices High and Still Climbing

Canada, Norway and New Zealand are the three countries, according to the report, where home prices are overvalued and still climbing.

“Economies in this category are the most vulnerable to the risk of a price correction—especially if borrowing costs were to rise or income growth were to slow,” the OECD states.

Prices Up But Sales Down

This interesting interactive graphic from the CBC shows how and where housing prices climbed in the month of March across Canada.

In Toronto and Vancouver, though prices are up, sales have slowed down.  In Calgary, however, both prices and sales are up by almost seven per cent in the month of May.

Let’s All Move to South Korea!

According to the OECD’s report, real estate is largely undervalued in South Korea, Japan, Germany, Ireland and Portugal.

Since that’s the case, how about checking out these tips from our colleagues at DuProprio for investing in foreign real estate?

Looking to sell your Canadian home?  Visit ComFree.com today to see how we can help you save thousands in commission.

Sources:

http://www.cbc.ca/news/business/story/2013/06/05/business-oecd-housing.html

http://www.theglobeandmail.com/report-on-business/top-business-stories/canadian-homes-among-most-overvalued-in-oecd-ranking/article12357717/

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Rosy Saadeh

About Rosy Saadeh

Rosy Saadeh is a Social Media Manager and Marketer and spends her time scouring the net trying to make new friends, help clients and post interesting stories about real estate and the like in Canada. Connect with her on Twitter, Facebook, Google+, and Pinterest.

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