Here are the countries most at risk of a housing bubble

Those that made top 10 list have high price-to-rent and price-to-income ratios

National Weekend Edition /
Jun.June 19, 2021 02:00 PM
Sweden is one of the countries most at risk (Getty)

Sweden is one of the countries most at risk (Getty)

The pandemic slammed the brakes on housing markets worldwide…but only for a moment.

Sales rebounded across the globe, and are now accelerating so fast that housing bubble concern is back.

New Zealand, Canada and Sweden are most at risk, according to an analysis by Bloomberg. It crunched housing market data from the 38 member countries of the Organization for Economic Cooperation and Development. Bloomberg came up with a top 10 list.

Many of the countries have price-to-rent and price-to-income ratios well above the historical average. Some Canadian cities have even seen year-over-year price growth of more than 30 percent.

The United States, which has had sky-high housing prices, clocked in at No. 7 on the list.

Norway, the United Kingdom, Denmark, Belgium, Austria, and France were also included.

Pricing across the member countries hit a record in the third quarter of 2020. Now, when averaging the price-to-income and price-to-rent statistics across the 38 member states, unaffordability surpassed 2008 levels at the end of 2020.

“A cocktail of ingredients is sending house prices to unprecedented levels worldwide,” Bloomberg’s Niraj Shah wrote in a report. “Record low interest rates, unparalleled fiscal stimulus, lockdown savings ready to be used as deposits, limited housing stock, and expectations of a robust recovery in the global economy are all contributing.”

Shah added that there is likely to be cooling in the future rather than a sharper collapse.

Japan and Italy were the only countries in which the current price-to-rent and price-to-income ratios are below the historical average.

[Bloomberg] — Dennis Lynch 





    Related Articles

    arrow_forward_ios
    (Illustration by The Real Deal with Getty Images)
    Home prices cooled at historic rate in July
    Home prices cooled at historic rate in July
    (Photo Illustration by The Real Deal with Getty Images)
    Cooling Sun Belt markets lead canceled home contracts
    Cooling Sun Belt markets lead canceled home contracts
    Martha’s Vineyard, home prices, inflation
    On Martha’s Vineyard, even doctors priced out of homes
    On Martha’s Vineyard, even doctors priced out of homes
    Disappearing starter homes
    New York City’s incredible shrinking starter home market
    New York City’s incredible shrinking starter home market
    (Photo Illustration by Steven Dilakian for The Real Deal)
    Luxury housing market took its biggest dive in 10 years
    Luxury housing market took its biggest dive in 10 years
    (Illustration by Priyanka Modi for the Real Deal with Getty)
    Contract signings for NYC homes diminish, as do new listings
    Contract signings for NYC homes diminish, as do new listings
    (Photo Illustration by The Real Deal with Getty Images)
    Mortgage rates jump, but so do applications
    Mortgage rates jump, but so do applications
    (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
    Flood-risk data shifted homebuyers’ searches, bids
    Flood-risk data shifted homebuyers’ searches, bids
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...