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Global home prices are on the rise, and numbers from the International Monetary Fund (IMF), the monetary policy arm of the UN, show that Canada ranks amongst the top ten of all of their housing indicators. While that sounds like a good thing, the IMF generally warns that too much growth means overvaluation. Overvaluation requires a correction, and if it goes too high, even a crash.

Most countries tracked by the IMF saw real home prices growth. This measure looks at how prices changed over the past 5 years. The top 5 countries for real price growth were

The median growth for all countries was 2.86% . The top five countries grew at least 3 times that rate.

Home prices grew faster than income in 15 of the 32 countries tracked by the IMF. This is a basic affordability measure for housing, and takes the median house price and compares it to the median disposable income over the life of a typical mortgage. The highest numbers were as follows:

The higher the ratio, the less likely the country is able to maintain home prices without a severe correction.

This is the primary measure the IMF uses to determine if a market is ?overvalued.? They use the ratio of home prices to the cost of renting, then measure the deviation from the normal. Generally speaking, it's a smarter idea to rent in these countries if all you can afford is the median house price (or less).

Home price growth is generally a good thing, but too much of a good thing usually has consequences. The further away these prices get from healthy, sustainable growth, the worse it will be for the market. Best case scenario, years of stagnation while wages catch up with prices ? not unlike what happened in the US. Worst case scenario?well, let's not use the C-word. Uh?not that one, the housing c-word.

The comments above are edited ([ ]) and abridged (?) excerpts from the original article by Kaitlin Last

If you're from Canada and the U.S., chances are you'll never see market capitulation. However, you'll likely see many corrections, and maybe even a couple of crashes. Here are the definitions of the meanings of the words: correction. crash and capitulation.

3. Your House: A Home, An Investment or a Ponzi Scheme?

In the past few decades, the concept of home ownership has been completely turned on its head. Previously, homes were considered a very long-term consumption good…[No one] ever considered tripling the value of their homes by retirement time and selling them to move beachside yet, somehow along the way, this became a reasonable investment expectation. Even today, home buyers still make their purchases with the hopes of escalating prices. [It begs answers to these questions: Is a house just a home? Should a house be expected to behave like an investment? Is the housing game nothing more than a Ponzi scheme where the end buyer before the market corrects becomes the "greater fool"? Let's try and answer those questions.] Words: 935

4. This Is Where The Uber Rich Are Buying (and Selling) Second Homes

There are over 552,000 multi-millionaires, and 87% of them own a second home. The wealth analysts at New World Wealth (NWW) have compiled their annual report on second home buying by multi-millionaires, those with over US$10 million in assets. Old money cites (NY, Hong Kong, etc?) top the list for the most secondary homes held by this segment of buyers, but some interesting new cities are experiencing rapid growth.

5. 3.1 Million Homes Owe More On Their Mortgage Than Their Home Is Worth

The number of homes with negative equity in the U.S. is still high, but the numbers are improving. At the end of the first quarter in 2017, 3.1 million homes owed more on their mortgage than the home was worth. This number improved from the previous quarter, with 91,000 homes regaining equity. The total number of mortgages underwater in the U.S. still stands at 6.1%.

6. B.I.S. Flags Canada for a Financial Crisis Next Year ? Here's Why

Now that Canada has been flagged for a recession next year, it'll be interesting to see how Canadians respond. Will they abstain from further binging, or are they too busy shopping for new homes to hear the warnings.

7. Toronto Housing Bubble: Average Selling Price Soars 28% y-o-y in February!

The average selling price across the Greater Toronto Area soared 27.7% year-over-year in February to $875,983.

8. Buying A House Today Will Turn Out To Be A Ruinous Experience In 5 Years Time ? Here's Why

The world will soon realise that all the assets that have been inflated to bubble levels will lose most of their value. Indeed, if we look at what could happen to house prices in real money (gold), the risk is such that buying a house today is likely to be a very costly and perhaps ruining experience.

9. Housing: Is It A Good Inflation Hedge?

Over long periods the inflation-adjusted price of homes in the U.S. has tended to increase by a little more than 1% per year. That doesn't mean owning a home is a good way to make a 1% real return on your money though. This article explains why.

10. Gold/Housing Ratio Analysis Says ?Housing Is A Much Better Buy Today Than Gold?

In a long-term strategy which employs both investments, there is a case for putting an over-weight on housing, and an under-weight on gold, given current relative price levels unless one is specifically investing for financial crisis.

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