The Economist says that Canada’s housing market is overvalued by at least 25 per cent. More likely 35%

The magazine named Canada along with the U.K. and Australia as being “notable” for having an overvalued housing market. The metrics it uses include home-value-to-rent ratios and prices relative to after-tax income.

It’s not the first time that Canada has ranked highly in the Economist’s analysis of property markets, but it is the first time it’s been at the top.

House prices compared to rents are 89 per cent overvalued, which is a rise of 73 per cent from two years ago. Compared with income prices are 35 per cent too high. 

related:

9 reasons your real estate venture could fail

Vancouver condo ‘better investment than gold’

Investing in real estate will be easier, if you give to charity

As the chart above shows that overall Trans-Canada Single Family Housing Sales are exhausted. Amazingly within that sales exhaustion are continuing potent Bull Markets in Toronto and Vancouver.

In the interview below Brian Ripley is questioned about the 2 charts showing how SFD properties in the hot markets are defying the national residential real estate sales slowdown as well as the ballooning strata inventory levels in both listings for sale and properties for rent.

Jim Rogers notes increased housing supply will mark the peak of the housing market and a major price decline will unfold. 

According to Hong Kong, “Ming Pao Daily News” reported on the 12th, the well-known investor Jim Rogers (Jim Rogers), said recently that Hong Kong real estate bubble has to burst the edge of Hong Kong within three years house prices will fall by more than 50%.

Singapore and Hong Kong at the time of acceptance of Rogers’ Ming Pao Daily News “interview, said the Hong Kong real estate bubble has been in extreme, sharp correction is reasonable. A substantial increase in housing supply in Hong Kong “will be the decisive factor for the price.”

Official data show that the Hong Kong SAR Government, 2014 Hong Kong individual completions for 15,720 residential units, compared with 2013 units in 8250 nearly doubled. Property annual report this year, the Hong Kong SAR Government announced April 1 predicts the next two years the amount of new homes completed in Hong Kong will be more than 30,000 units, a record high since 2004.

In addition to excess supply, the Hong Kong Government may cancel HK dollar peg system, which will also impact prices in Hong Kong. Rogers has said publicly early in 2015, the Hong Kong Government has the opportunity to cancel the linked exchange rate system.

Larger Chart

The chart above shows the average detached housing prices for Vancouver, Calgary, Edmonton, Toronto*, Ottawa* and Montréal* (the six Canadian cities with over a million people) as well as the average of the sum of Vancouver, Calgary and Toronto condo (apartment) prices on the left axis. On the right axis is the seasonally adjusted annualized rate (SAAR) of MLS® Residential Sales across Canada.

For more commentary on the above chart go HERE

For Brian’s Plung-O-Meter go HERE