Canada’s housing market is among the frothiest in the world, according to a new OECD reading that warns of possible trouble in the event of an interest rate or income shock.
To be clear, the Bank of Canada’s benchmark interest rate isn’t expected to even begin rising until late next year or early 2015, but the recent measure by the Organization for Economic Co-operation and Development is food for thought.
The OECD uses a combination of two measures to calculate how residential real estate prices are overvalued or undervalued.
By this reading, Canada ranks third, behind Belgium and Norway, and is followed by New Zealand and France.
On the other end of the scale, the most undervalued real estate is in Japan, Germany, South Korea, Ireland and Portugal.