Canada has the Most Overvalued Housing Market in World [Chart]
The Chart of the Week is a weekly feature in Visual Capitalist on Fridays.
In every inflating bubble, there’s usually two camps. The first group points out various metrics suggesting something is inherently unsustainable, while the second reiterates that this time, it is different.
After all, if everyone always agreed on these things, then no one would do the buying to perpetuate the bubble’s expansion. The Canadian housing bubble has been no exception to this, and the war of words is starting to heat up.
On one side of the ring, we have The Economist, that came out last week saying Canada has the most overvalued housing market in the world. After crunching the data in housing markets in 26 nations, The Economist has determined that Canada’s property market is the most overvalued in terms of rent prices (+89%), and the third most overvalued in terms of incomes (+35%). They have mentioned in the past that the market has looked bubbly for some time, but finally Canada is officially at the top of their list.
Of course, The Economist is not the only fighter on this side of the ring.
Just over a month ago, the IMF sounded a fresh alarm on Canada’s housing market by saying that household debt is well above that of other countries. Meanwhile, seven in ten mortgage lenders in Canada have expressed “concerns” that the real estate sector is in a bubble that could burst at any time. Deutsch Bank estimates the market is 63% overvalued and readily offers seven reasons why Canada is in trouble. Even hedge funds are starting to find ways to short the market in anticipation of an upcoming collapse. Canada’s housing situation could give rise to the world’s next Steve Eisman, Eugene Xu, or Greg Lippmann.
On the opposing side of the ring, who will contend that the Canadian housing market is just different this time? Hint: look to the banks and government.
Stephen Harper, Canada’s Prime Minister, has tried to dispel fears. He recently told a business audience in New York that he didn’t anticipate any housing crisis in Canada.
Just this week, the Bank of Canada also tried its best to deflate housing bubble fears. “We don’t believe we’re in a bubble,” says Stephen Poloz, the Bank’s Governor. “Our housing construction has stayed very much in line with our estimates of demographic demand.”
Poloz suggested that housing costs do not necessarily have to contract to match the incomes of Canadians. Instead, he expects growth in the economy to raise wages and make housing more affordable.
Strangely enough, by the Bank of Canada’s own estimate, the housing market is overvalued by as much as 30%. It is hard for housing to become more affordable when prices are rising in double digits in a year. Combine this with the fact that household debt rates keep setting new records, and one side of the fight might get tilted sooner than later.
How To Spot Fake News
With misinformation all over the web, how do you discern fake news from real? Here are the characteristics of fake news and what to look for.
How To Spot Fake News
“Fake news” used to be a relatively uncommon problem, but over the last decade, and especially during the COVID-19 pandemic, increasing consumption of news and articles has caused misinformation to run wild.
Far from a new concept, misinformation and cherry-picked stories have been used throughout history as a form of propaganda or information warfare. However, the rise of social media as a hub for sharing articles has spread “fake news”—false or misleading information presented as legitimate news—all over the internet.
Fueled further by increasing polarization, as well as the use of the term by former U.S. President Donald Trump to also refer to negative coverage (whether legitimate or misinformed), it seems more difficult than ever to separate trustworthy from misleading sources.
With this in mind, we combined guidance from non-profit journalism project First Draft News and the International Federation of Library Associations and Institutions (IFLA) to create this guide for understanding “fake news” and how to spot it.
The Different Types of “Fake News”
In order to spot fake news, you have to know the many forms misinformation can take.
Not all fake news is created equal, or even with the intent to deceive. Some start as opinions or jokes that become misunderstood, twisted over time, and eventually turn into misinformation. Others begin with the sole purpose of deception.
Online Misinformation From Least Intentional to Most
Articles or videos created to mock or laugh at an issue. If created without being an obvious parody, these types of articles can still fool readers and be shared as “real.”
- False Connection
Stories with headlines, visuals, and captions that don’t support the content. Sometimes the cause is an honest mistake or poor journalism, but other times the false connections are deliberate to draw more attention.
- Misleading Content
Misleading use of information to frame an issue or individual, especially one not involved in the story. This can be caused by poor journalism or political influence, but is also caused by opinions being shared as news and the increasingly blurring line between the two.
- False Context
Genuine content that is shared with false contextual information, such as an incorrect date or a misattributed quote. This type of misinformation can still appear on news sites with poor fact-checking or opinion-based reporting, but is clearly driven by an agenda with an attempt to influence.
- Imposter Content
When genuine sources are impersonated in order to deceive the audience. Though this type of misinformation is used in parody, it is also used for profit and propaganda purposes, such as by sites disguised to look like news organizations or using fake credentials.
- Manipulated Content
The deliberate manipulation of information, such as digitally altering an image or making up quotes. This type of misinformation is easily proven fake with some research, but can spread too far before it is fact-checked.
- Fabricated Content
Newly created false content designed to deceive and do harm. These include deepfake videos and sites posing as legitimate news organizations.
Despite many types of misinformation appearing to be obvious at a glance, it’s harder to discern when browsing online. In a 2019 global survey on social media by Ipsos, 44% of people admitted to being duped by fake news at least once, while others may have been duped unwittingly.
How To Tell If An Article is “Fake News”
With many types of misinformation to contend with, and trust in media organizations falling in the U.S. and around the world, it might seem like you’re surrounded by “fake news,” but there are a few things you can check to be sure.
- The Source
Investigate the site to make sure it’s legitimate, and check its mission and its contact info to understand if it’s news, satire, or opinion.
- The URL
Be wary of unusual top-level domain names, like “.com.co” that are designed to appear legitimate, such as ABCnews.com.co.
- The Text
Does the article have spelling errors or dramatic punctuation? This can be an easy find for simple fabricated content, as most reputable sources have high proofreading and grammatical standards.
- The Information
Read past click-baity headlines, note who is (or isn’t) quoted, and verify the information on other sites. This is also a good way to separate opinion pieces from news.
- The Author
Check the author’s bio and do a quick search on them. Are they credible to write about their story? Are they real?
- Supporting Sources
Click on the supporting links, and perform reverse searches on images. Do they actually support the story, or are they irrelevant (or worse, manipulated).
- The Date
Sometimes older news stories are shared again and gain traction because of current events, but that doesn’t mean they’re relevant or accurate.
- Your Bias
Especially with the rise of opinionated journalism and websites profiting from polarization, consider the intended audience for this story and if your own beliefs could affect your judgement.
- The Experts
If a story feels flimsy, or doesn’t seem to be properly cited, consider asking an expert in the field or consulting a fact-checking site.
More than anything, consider that outrageous misinformation has an easier time spreading on the internet than boring real news. An MIT study found that false stories on Twitter were 70% more likely to get retweeted than accurate news.
But armed with knowledge about what “fake news” looks like, and with increased pressure on news organizations, the tide can be turned back in the favor of accurate news.
Visualizing the UK and EU Trade Relationship
The UK and the EU have recently laid out new terms for their relationship. So how important is the UK’s trade with the EU?
Visualizing the UK and EU Trade Relationship
With Brexit solidified and a new trade deal having been struck between the UK and the EU, it appears that a sense of normalcy has returned to the European continent.
The Trade and Cooperation Agreement (TCA) between the two entities came into effect on January 1st, 2021, corresponding with the UK officially leaving the EU Single Market and Customs Union on the same day. The new deal will help the status quo of trade continue, but how important is trade between the EU and the UK?
This visualization, using data from the British House of Commons’ Statistics on UK-EU Trade Briefing Paper, reveals the significance of trade between the UK and EU member states.
Who Does the UK Trade With in the EU?
The EU is the UK’s biggest global trading partner, representing 47% of the country’s total trade.
To break it down further, the EU is the buyer of 42.6% of the UK’s total exports, while also being the source of 51.8% of their total imports. Here’s a closer look at exports and imports by country.
|Country||% of UK's Exports to the EU||% of UK Imports from the EU|
|🇨🇿 Czech Repbulic||1.1%||1.8%|
|🇪🇺 Total EU 28||100%||100%|
The UK’s biggest trading partners within the EU are Ireland, Germany, the Netherlands, and France. Germany comes in at number one, making up nearly 21% of the UK’s imports and receiving almost 19% of the country’s exports.
Here’s a breakdown of the trade balances between the UK and the individual EU member states.
What’s in the Bag?
In any trade relationship, it’s also worth examining what types of products and services are switching hands.
The UK’s top three goods imports from the EU (in terms of percentage of total imports) are:
- Motor vehicles (18%)
- Pharmaceuticals (7%)
- Electric machinery and appliances (4%)
Without the new agreement, goods would face tariffs based on the World Trade Organization’s standards. For example, motor vehicles, would have an average tariff of 10% imposed on them, without the provisions of the agreement.
The UK’s top three service imports from the EU are:
- Travel (33%)
- Business services (27%)
- Transportation (18%)
Looking at services, the main import from the EU is travel, followed closely by business services and transportation. Travel makes the top three, as many countries in the EU make attractive vacation spots for UK citizens.
The UK’s top three goods exports to the EU (in terms of percentage of total exports to the EU) are:
- Petroleum and petroleum products (12%)
- Motor vehicles (10%)
- Transport equipment (6%)
In terms of exports, petroleum is the UK’s largest export to the EU, representing 68% of the country’s total petroleum exports.
The UK’s top three service exports to the EU are:
- Business services (33%)
- Financial services (21%)
- Travel (14%)
The main service export is business services, such as accounting, legal, advertising, R&D, engineering, and so on. Travel to the UK is a significant revenue generator as London is one of the top tourist destinations in the world.
EU vs. Global Trade
The UK’s relationship with other countries has remained steady. China is one of the country’s most important export destinations, growing 7% per year from 2010-2019.
At the same time, the UK’s exports to the United States have grown just over 4% per year over the same period, continuing to increase at a similar rate up to 2030.
While the UK currently has a £79 billion ($108 billion) trade deficit with the EU, they have a surplus of £49 billion ($67 billion) with non-EU countries. Additionally, the share of the UK’s exports going to the EU has been consistently falling over the last number of years. Foreign direct investment flows between the two entities have also been drastically reduced.
However, the UK and EU trade relationship is still highly intertwined and significant. Not only are the two connected through intangible flows but physically as well via pipelines, transport highways, and cables. In a typical year, 210 million passengers and 230 million tonnes of cargo are transported between the two entities.
The TCA will help to regulate these flows and continue a sense of status quo, however, it’s worth noting that if EU regulations are not met, tariffs could be imposed.
The Economist Intelligence Unit recently determined risk and resilience factors for different UK industries based on the agreement. The report found that the food & agriculture, automotive, and financial services industries are most at risk, due to interconnected supply chains and the risk of tariffs being imposed. The life sciences and tech industries stand to do the best.
The Trade and Cooperation Agreement
Overall, Brexit has had significant ramifications for all nations involved. Ireland, for example, is now geographically cut off from the EU, creating potential obstacles for both the movement of people and goods.
Now, after years of discussions, the UK and the EU have finally agreed to the terms for their new relationship, with a focus on sustainable trade, citizens’ security, and governance for long-standing cooperation, in order to guarantee a level playing field. The TCA has helped ease the transition, and while they’re no longer in a union, the UK and the EU have created a strong base for trade to continue normally.
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