![\"a](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2013\/06\/Toronto-home-300x225.jpg\")
<\/a>The past month has seen, if not optimism, than at least a sense of relief when it comes to the state of Canada’s housing market. BMO declared <\/a>the market was cooling, not crashing, and also reported<\/a> that some cities were also seeing a spike in interest in the often-maligned condo market.<\/p>\nBut a new report<\/a> on global housing values from the Organisation for Economic Co-operation and Development (OECD) suggests that Canada is especially vulnerable to a price correction.<\/p>\n Here’s how they measured valuation: if the price-to-rent ratio and the price-to-income ratio (a key affordability measure) were above the long-term averages of homes in the country, the properties are said to be over-valued. And with that rubric, Canada comes in third place, behind Belgium and Norway when it comes to over-valuation.<\/p>\n According to the study, because homes in Canada, Norway and New Zealand\u00a0appear overvalued but prices are still rising, the markets face a higher risk of a price correction, “especially if\u00a0borrowing costs were to rise or income growth were to slow.”<\/p>\n However, the Bank of Canada doesn’t seem terribly eager to change the interest rate anytime soon. At the end of the May, the central bank announced<\/a> it was keeping it untouched at 1 per cent while other experts have been predicting<\/a> there won’t be any borrowing rate shake-ups over the next few years.<\/p>\n The two countries with relatively enviable markets include Switzerland and Germany:\u00a0houses appear undervalued but prices are rising. The European countries have show “strong growth in household disposable income and favourable financing conditions.”<\/p>\n Greece, Ireland, Portugal, Slovenia, Slovakia, Czech Republic and Japan all have homes undervalued, but prices continue to fall.<\/p>\n For more info, see the chart below…<\/p>\n
![\"OECD](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-05-at-10.37.34-AM.png\")
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