In most cases, mobility rate also correlates with a higher rate of recovered people in the population. In general, the higher the mobility rate, the more economic activity this signifies. Note that China does not show up in the graphic as the government bans Google services.ĬOVID-19 recovery rates rely on values from CoronaTracker, using aggregated information from multiple global and governmental databases such as WHO and CDC. The number of recovered cases in a country is measured as the percentage of total cases.ĭata for the first measure comes from Google’s COVID-19 Community Mobility Reports, which relies on aggregated, anonymous location history data from individuals. This refers to the change in activity around workplaces, subtracting activity around residences, measured as a percentage deviation from the baseline. Today’s chart measures the extent to which 41 major economies are reopening, by plotting two metrics for each country: the mobility rate and the COVID-19 recovery rate: The Road to Recovery: Which Economies are Reopening?ĬOVID-19 has brought the world to a halt-but after months of uncertainty, it seems that the situation is slowly taking a turn for the better. However, Canada still makes an appearance in the top five with a debt-to-GDP ratio of 100.7%. Switzerland (128.7%), Australia (120.3%), and Denmark (115.4%) top the list here with consumer debt far exceeding country GDP levels. Credit to Households (% of GDP)Įxceedingly high debt ratios point to a strain on consumer finances – and when finances are strained, the chance of a default increases. The latter two (Canada/New Zealand) have appeared near the top of all three bubble indicators, so far. Real house prices have increased in all of the 22 markets, with the exception of Italy (95.5).įor this indicator, there are five markets that stand out as having fast-rising prices: Portugal (131.8), Ireland (127.6), Netherlands (121.9), Canada (124.1), and New Zealand (121.9). For how long will people afford to buy increasingly expensive houses, if their incomes continue to lag? 3. In places where rents are lagging housing prices, so are the levels of household income. There are three familiar names at the top of this bubble indicator: New Zealand (156.8), Canada (155.3), and Sweden (145.7). For example, in Portugal-where house prices have skyrocketed over recent years-rents have increased at nearly the same rate, giving the country a 99.2 score. Meanwhile, Sweden (172.8) and Norway (168.2) are not far behind.Įlsewhere in the world, this ratio is much more in line with expectations. New Zealand (196.8) and Canada (195.9) have seen ratios of housing prices to rents nearly double since 2015. When looking at housing prices in comparison to rents, there are four countries that stand out. In other words, the data is not representative of the ratio itself-but instead, how much the ratio has risen or fallen since 2015. It should be noted that most of the measures here are shown in an index form, using the year 2015 as a base year. Let’s look at each bubble risk indicator, and see how they apply to the 22 countries covered by the housing dashboard.
Ranking high on just one of these metrics is a warning sign for a country’s housing market, while ranking high on multiple measures signals even greater fragility.
The ratio of house prices to household incomeĪmount of debt held by households, compared to total economic output The ratio of house prices to the annualized cost of rent
Key Housing Market IndicatorsĮarlier this week, Bloomberg published results from a new study by economist Niraj Shah as he aimed to build a housing bubble dashboard. Further, they are also warning that countries like Canada and New Zealand may be overdue for a correction in housing prices. In recent years, experts have been closely watching several indicators that point to rising bubble risks in some housing markets. With a decade-long bull market and an ultra low interest rate environment globally, it’s not surprising to see capital flock to housing assets.įor many investors, real estate is considered as good of a place as any to park money-but what happens when things get a little too frothy, and the fundamentals begin to slip away? Mapped: Countries With the Highest Housing Bubble Risks
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