The Economist published their most recent global housing prices report, which shows that housing prices in the U.S. have recovered to a new high (albeit marginal), while Spain and Ireland are seeing increases again and the Commonwealth is continuing to see prices increase in recent years. 

Some of these rises can be attributed to the influence of foreign money, some attributable to the $1.3 trillion that has exited China and found its way into residential markets in the most valuable cities in the world. 

In the U.S., Chinese investors bought some 29,000 homes in the 12 months to March 2016 with a total value of $27bn, according to the National Association of Realtors. Much of this money is focused on a handful of cities: Seattle, San Francisco, New York and Miami. Foreign money has helped propel skyrocketing prices in other places, too. In Vancouver, home values have risen by 47% in four years; in London they have risen by 54%; and in Auckland the rise has been a whopping 75%. The influence of foreign capital flows on housing markets is being scrutinised, particularly as affordability becomes ever more stretched. 

The Economist measures house prices against two metrics: rents and income. If, over the long run, prices rise faster than the revenue a property might generate or the household earnings that service a mortgage, they may be unsustainable.

On this basis homes are fairly valued in America by an average of our two measures. But across Australia, Canada, New Zealand, and to a lesser extent, Britain, they look severely overpriced. Policymakers may well be left scratching their heads, however: increasing housing affordability for citizens and encouraging investment from foreigners are likely to be irreconcilable goals.

The Economist also publishes interactive house-price guides to American cities and British regions.

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