New research by Deutsche Bank finds NZ is the third-most over-valued country for housing in the world - at least in terms of of the home price-to-rent ratio's percentage above its historic average.
Deutsche Bank economists Peter Hooper, Torsten Slok and Matthew Luzzetti ranked different countries by two ratios: home prices to income and home prices to rent.
Those ratios were then compared to their historic norms to gauge whether each country's housing market was over or under-valued.
The report finds New Zealand is the third most overheated market, running 77% ahead of its historic home price-to-rent ratio.
In terms of home prices to income, New Zealand is sixth-most overvalued, running 26% ahead of its historic ratio.
Wall Street Journal analysis of the Deutsche Bank study notes Canada - the most overvalued market - is "very open to foreign investors" at a time of unprecedented global liquidity.
By contrast, Japan - the most undervalued market - is the most closed to foreign investment.
The Journal speculates that Belgium is a special case. The European economic crisis has seen an influx of diplomats and other activity in Brussels, home of the EU Parliament and bureaucracy.
Chris Keall
Thu, 12 Dec 2013
Thu, 12 Dec 2013
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
NZ third-most over-valued housing market in world - Deutsche Bank
34490