It’s always great to see Canada rank high in lists measuring happiness, prosperity, business opportunities, natural beauty and so many other factors that make our lives worth living. However, the rising prices of houses for sale in Canada may have gotten some of us wondering if we aren’t the country with the most expensive property market.
The reality is, we aren’t. According to an article which appeared recently in the British newspaper The Telegraph, Canada has the third most expensive housing market in the world in terms of price vs. income, coming after New Zealand and Belgium. In terms of prices vs. rent, it comes second, after New Zealand. What’s more, several other countries in the Commonwealth and Europe also experience high property prices — Australia, Norway and the UK.
The graph below, based on data coming from the Organisation for Economic Co-operation & Development (OECD), shows in which countries home buyers are paying too much (red circles), just about right (yellow circles) and where the market provides the most bargains (green circles).
How were the indexes calculated?
In calculating the indexes you see in each circle, the OECD compared house prices to rents (first index) and wages (second index), then those values against the long-term average, set at 100. The extent to which the values are above or below 100 shows by much the markets are overvalued or undervalued, respectively. The third index, in percentages, shows the annual rise of house prices in real terms.
While Canada doesn’t head the list of the most expensive real estate markets, when looking at city rankings, however, we find Vancouver sitting right at the top of the list of most expensive cities in North America, with the average home price at a stunning $733,335, around $50,000 more than the US’s most expensive city, San Francisco. Oh, Canada!