According to the Deutsche Bank study, the country's market is overvalued in some key markets by as much as 60 per cent, placing Canada top of a very unflattering list.
Deutsche Bank uses a formula that averages two key metrics; namely, home prices compared to rent and home prices compared to income. Those overvaluations are 88 per cent and 32 per cent respectively.
The international media has already jumped on the findings, with the Wall Street Journal suggesting investors give Toronto and Vancouver a wide berth.
“On the other hand," continues the WSJ, "if you can get around Japan’s restrictions on foreign investment, an apartment in Tokyo looks like a steal.”
The take on Canada's market contradicts the analysis of a RE/MAX report released Thursday and suggesting the five-year high for the average home price is sustainable and strong indication of an even stronger market.
Others are less bullish on the market, still grappling with key mortgage rule changes introduced in July 2012 and with high household debt expected to challenge homeowners if and when interest rates increase.
"With a high level of employment and individual net worth tied to the value of the housing stock," warned Fitch Ratings this fall, "a housing downturn could have serious consequences for the overall economy.”
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