Worldwide house prices charted. Canada is riding a bubble. Updated.
From Chart of the day at Business Insider:
Commenting on the US: "If you really think it was all Fannie and Freddie's fault, then you have to explain why the U.S. just happened to have the same (roughly) arc of a housing boom as basically every other industrialized country all around the world at the same time."
You can see for yourself Canadian home prices are resting on foam about 30% higher than the US.
Mike Shedlock of Global Economic Analysis cautions us to deal with this overvaluation of real estate. "Canada's enormous property bubble will collapse and perhaps a global slowdown is just the right catalyst this go around." (in this article) and "Australia is a basket case on the bursting of its property bubble, Canada has the second or third largest property bubble next to China and Australia" (inside this article)
Added: To me it's basic: You should be able to rent something out for a little more than the investment needed to buy that something. Rents are way out of whack, even allowing that people will pay a premium to have their own place.
Footnote: Like me, you are probably wondering why Germany's housing prices are flat. The Guardian has a good article. Rentals are abundant (up to 90% of the housing stock in Berlin), 20% down is the minimum to buy a house, and so on. Like most stories, it's kind of complicated.
UPDATE: Excellent report at The Economist linked by Small Dead Animals Nov. 26th. Stats show overevaluation of the average home in Canada at 29% (based on incomes) and 71% ( based on rents).