Only Canada's house-price-to-rent ratio tops NZ
Economist says price-to-rent ratio is an analogue to the price-to-earnings metric used to rate the performance of publicly listed companies.
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.
NBR staff
Tue, 03 Apr 2012
Tue, 03 Apr 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Only Canada's house-price-to-rent ratio tops NZ
19831