Housing prices keep rising faster than the salaries of residents of most countries of the Organization for Economic Cooperation and Development (OECD).
Although Spain is not in danger of a "financial bubble" in the real estate sector, the imbalance of rising housing prices to salary growth in September 2021 was almost 20% higher than in 2015 (the base year for statistics). At the same time, the Netherlands, New Zealand, Portugal, and Luxembourg have values 40% higher than those of seven years ago.
The rise in residential property prices has been uneven in recent years. The main reason was that salary growth did not coincide with the increase in the market value of real estate. This is evidenced by the dynamics of the ratio between the cost of housing and the amount of income that households have in OECD countries.
Based on the available data for the third quarter of 2021, the Netherlands became the most prominent example of this dynamics. Housing prices in this country exceed the incomes of the population by 49.5% compared to 2015. Such countries as New Zealand (45.4%), Portugal (41.3%), and Luxembourg (41.1%) showed a difference of over 40%.
Over the past 7 years, the average OECD imbalance has been 20.8%. 10 of the organization’s countries exceeded the third quarter 2021 average. Moreover, it is worth adding such large economies as Canada (36.7%), Germany (33.7%), and the USA (26.2%). Spain, with its indicator of 19.5%, is below the average among the 38 countries of the organization.
However, Spain's indicators were higher than the average for the eurozone countries, which closed September last year with an imbalance of 17.1% higher than in 2015. For European countries with a single currency, this indicator has become the highest in the 21st century.
There are countries where rising housing prices keep lagging behind the growth of household incomes. These include South Korea, Finland, and Italy. Although recently they have been showing a tendency to increase the imbalance towards residential real estate.