The Unassuming Economist

House Prices in OECD Countries: Where Do They Stand?

When comparing current house prices to the fourth quarter of 2006, the scale is balanced with half of the countries showing an increase in house prices and the other half showing a decline. However, the picture changes when we look at standard house price valuations in OECD countries. More than half of the OECD countries are above their historical averages for price-to-income and price-to-rent ratios. But, these valuations metrics should be taken with a grain of salt (e.g. in Finland, there is a difference between how actual average markets rents and the CPI rent component have developed, which over time results in difference in price-to-rent ratio).