|Global Real Estate Ratios Show Extent Of Bubble|
November 13th, 2008 www.tradersnarrative.co
Real estate, as an asset, derives its value from two sources: personal income and rents. The first makes it possible for an owner occupied property to be purchased while the second allows for an investor to purchase real estate.
The following charts show the relationship between real estate prices and these two variables:
The data is normalized with 100 being the long term average. Here are some quick take aways:
You can check out the OECD report yourself to get the full details. There are many more countries included but I didn’t show them because the charts would have gotten too busy. In any case, they were either too small as an economy or the data was at neither extreme so it wasn’t interesting. Look in the free resource section for the full spreadsheet.
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