New Zealand's house prices are among the most overvalued in the world, a new report by The Economist says.
The magazine looked at house prices in various countries around the globe and compared them to rents and incomes in those countries.
It assessed the price-to-rent and price-to-income ratios against their long-term averages to work out whether they were overvalued.
New Zealand houses were expensive by both measures, it found.
New Zealand houses were 74 per cent overvalued compared to rents, the third-worst out of the 23 territories surveyed, behind Canada (76 per cent) and Hong Kong (79 per cent).
When prices were compared to incomes New Zealand was 30 per cent overvalued, fourth behind Canada (32 per cent), Australia (33 per cent) and Belgium (46 per cent).
New Zealand was also among the fastest-growing housing markets, coming in sixth with prices up 7.3 per cent year-on-year.
Ireland had the fastest growth with prices up 12.5 per cent, but prices in the former "Celtic Tiger" are still down more than 42 per cent from 2008.
Despite its slowing economy and rising unemployment, prices in Australia are up 10.4 per cent on this time last year.
The Economist found house prices were at least 25 per cent overvalued in nine countries.
"Before the financial crisis of 2007-08 low long-term interest rates fuelled an extraordinary house-price boom around the world. That bubble was pricked in the crisis and subsequent recession," the magazine said.
"Since then, however, central banks' attempts to crank up the recovery by pushing down long-term interest rates to new lows have had a predictable consequence in many property markets. House prices are now rising in 18 of the 23 economies that we track, in eight of them at a faster pace than three months ago."
Demographia Housing Affordability Survey co-author Hugh Pavletich said there were some flaws with The Economist's survey but it was yet another measure showing New Zealand's houses were overpriced.
"Housing should not exceed three times household incomes but overall in New Zealand it's 5.5 times incomes, while in Christchurch it's six times and in Auckland it's eight," he said.
"Another measure is total housing stock value to GDP, which should not really exceed 1.2 times, where it is in the USA. In New Zealand it is 3.3 times."
Pavletich said he was pleased to see housing high on the political agenda, describing it as the "No 1 election issue".
But the New Zealand Property Investors Federation denied there was an affordability crisis, citing the latest Massey University Home Affordability Study that showed home affordability had improved or stayed the same in nine of 12 regions surveyed.
The three regions where affordability worsened were Auckland, Canterbury and Queenstown Lakes.
However, the federation's executive officer Andrew King said rental affordability could become an issue if taxes proposed by some political parties were put in place.
"When a capital gains tax is combined with Labour's other policy to ring-fence rental property losses, it will lead to significant increases in the cost of providing homes for tenants," he said.
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