BuzzBuzzHome Corp.
March 9, 2011

A recent report by The Economist has found that Hong Kong and Australia are home to the world’s most over-valued houses.

Canada, meanwhile, fared quite well. The magazine found that Canadian houses were about 11.4 percent over-valued – which, compared to the two countries that top the list – is nothing: Australian homes are over-valued by 56.4 percent; Hong Kong’s by 53.7 percent.

In fact, Canada ranks nowhere near the top of the list (no thanks to Vancouver, say some):

Click to enlarge

The Economist’s index calculates the ratio of prices to rents and pits it against the long-run average. As the magazine explains:

“In theory, the price of a home should reflect the value of the services it provides. People who choose to rent their homes buy those services on a monthly basis. Home prices should therefore reflect the rents that tenants pay.”

Interesting stuff. . .

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