Only Canada's house-price-to-rent ratio tops NZ

New Zealand house prices are the world's second highest relative to rent income generated, says The Economist.

A new global house price survey by the magazine, taking in data up to the fourth quarter of 2011, adds a new price-to-rents ratio - which it says is an analogue of the price-to-earnings ratio used to judge the performance of company's listed on the share market.

And just as a low P/E ratio is good for investors in a publicly-listed company, a low price-to-rent ratio is good for property owners.

By this metric, New Zealand homes are over-valued, with a price-to-rents ratio of 68.

Only Canada is higher, on 76.

Australia is on on 48, Britan 26 and the US -12.

See The Economist's full global survey here.

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