{"id":7458,"date":"2015-04-21T06:04:29","date_gmt":"2015-04-21T11:04:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7458"},"modified":"2015-04-21T06:04:29","modified_gmt":"2015-04-21T11:04:29","slug":"canadian-house-prices-35-overvalued-economist-magazine-says","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7458","title":{"rendered":"Canadian house prices 35% overvalued, Economist magazine says"},"content":{"rendered":"<div class=\"story-headline\">\n<h3 class=\"story-title\"><a href=\"http:\/\/www.cbc.ca\/news\/business\/canadian-house-prices-35-overvalued-economist-magazine-says-1.3040698\" target=\"_blank\">Canadian house prices 35% overvalued, Economist magazine says<\/a><\/h3>\n<\/div>\n<p class=\"story-deck\"><strong>Cheap borrowing costs are driving up prices in markets around the world<\/strong><\/p>\n<p>In a survey of housing costs around the world, the Economist magazine says Canada&#8217;s housing prices are 35 per cent overvalued when compared to Canadian incomes.<\/p>\n<p>Against the level of Canadian rents, housing prices come in 89 per cent overvalued, according to the Economist housing index.<\/p>\n<ul>\n<li><strong><a href=\"http:\/\/www.cbc.ca\/news\/business\/overvalued-housing-prices-and-how-to-read-them-don-pittis-1.2898003\">Overvalued housing prices and how to read them: Don Pittis<\/a><\/strong><\/li>\n<li><strong>\u200b<a href=\"http:\/\/www.cbc.ca\/news\/business\/face-it-canada-s-housing-market-could-fall-like-oil-don-pittis-1.2873740\">Face it, Canada&#8217;s housing market could fall like oil<\/a><\/strong><\/li>\n<\/ul>\n<p>In calling Canadian house prices out of kilter, the Economist joins voices such as\u00a0<a href=\"http:\/\/www.cbc.ca\/news\/business\/stephen-poloz-says-up-to-30-overvalued-housing-big-risk-to-economy-1.2867184\">Bank of Canada governor Stephen Poloz<\/a>,\u00a0<a href=\"http:\/\/www.cbc.ca\/news\/business\/housing-prices-20-overvalued-in-canada-fitch-warns-1.2706388\">ratings agency Fitch<\/a>\u00a0and even\u00a0<a href=\"http:\/\/www.cbc.ca\/news\/business\/imf-warns-on-house-prices-in-canada-and-elsewhere-1.2673122\">the International Monetary Fund<\/a>, in pointing out that the rise of house values is out of sync with Canadian incomes.<\/p>\n<p>Of the 26 markets surveyed, the magazine found seven where housing prices are more than 25 per cent overvalued.<\/p>\n<p>Belgium leads the pack, with house prices 50 per cent overvalued relative to income. But also highlighted are Australia, France, Britain and Sweden.<\/p>\n<p><strong>Too cheap to borrow<\/strong><\/p>\n<p>The Economist puts the blame on &#8220;ultra-loose&#8221; monetary policy. Mortgage rates are at historic lows around the world.<\/p>\n<p>Cheap borrowing has encouraged consumers to jump in and buy, driving demand and pushing prices higher.<\/p>\n<p>The result is a\u00a0bubble, as housing prices rapidly outpace both consumer incomes and rental costs.<\/p>\n<p>In Canada, housing prices have risen steeply in the past decade, with the hot markets of\u00a0\u00a0<a href=\"http:\/\/www.cbc.ca\/news\/business\/average-canadian-house-price-climbs-9-to-439-144-in-march-from-year-earlier-1.3033636\">Toronto and Vancouver seeing increases<\/a>\u00a0of 7.8 per cent and 7.1 per cent respectively in the past year.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canadian house prices 35% overvalued, Economist magazine says Cheap borrowing costs are driving up prices in markets around the world In a survey of housing costs around the world, the Economist magazine says Canada&#8217;s housing prices are 35 per cent overvalued when compared to Canadian incomes. Against the level of Canadian rents, housing prices come [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,103,1956,195,2340,431,4869,4868],"class_list":["post-7458","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-canada","tag-canadian-housing-market","tag-debt","tag-housing-market","tag-interest-rates","tag-mortgage-rates","tag-overvalue"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7458"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7458\/revisions"}],"predecessor-version":[{"id":7459,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7458\/revisions\/7459"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}