Most overvalued property markets

Having analysed 21 established property markets worldwide, The Economist magazine has compiled a list of the most expensive home prices when compared against rents.

The report reveals that Canada is the most overpriced property market of the 21 nations, with average prices 76% overvalued. Prices of homes in Canada are 54% overvalued when both rents and income were taken into account.

Properties in New Zealand were deemed the second-highest in the world at 68% overvalued compared to rents generated. Home prices in New Zealand were 20% overvalued compared with income. Prices were, on average, 44% overvalued, as compared to rents and income.

New Zealand was followed by the property markets in Belgium (65% overvalued), Singapore (60%), Hong Kong (58%) and Australia (48%).

The findings of the survey revealed that increasing rents are helping to cut into a backlog of unsold homes in many countries.

The report also suggests that buy to let investors are, by and large, achieving relatively low rental returns across much of Canada, New Zealand, Belgium, Singapore, Hong Kong and Australia.