A chart from Alan Ruskin at Deutsche Bank showing the countries that having housing markets that still have not adjusted to fair value by the usual measures of price to income and price to rent ratios.
For the text record the worst remaining un-busted housing markets are:
Belgium
Canada and Norway in a close tie for second
France Australia vying for fourth
NZ and Netherlands
UK
Spain
Finland (overvalued strictly on Price to rent)
Denmark
Italy (overvalued mostly on Price to income)
Of housing booms and busts
The only thing that could save the Spanish banks at this point given the extreme pain from the small correction so far is polar melt causing the gulf stream to shut off precipitating a mass migration. (How's that for a doomer angle on it?)
Hat tip: VREAA
For the text record the worst remaining un-busted housing markets are:
Belgium
Canada and Norway in a close tie for second
France Australia vying for fourth
NZ and Netherlands
UK
Spain
Finland (overvalued strictly on Price to rent)
Denmark
Italy (overvalued mostly on Price to income)
Of housing booms and busts
The problem for the likes of Spain, the UK, Denmark and NZ, is that even after the adjustment, these markets are still substantially overvalued at least by these widely used metrics. The Spanish data would tend to point to an adjustment in these ratios by a further 25% before fair value is reached – presumably mostly through house price adjustments. This is before any overshooting, related to constrained policy, is considered.
The only thing that could save the Spanish banks at this point given the extreme pain from the small correction so far is polar melt causing the gulf stream to shut off precipitating a mass migration. (How's that for a doomer angle on it?)
Hat tip: VREAA
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