Canada has the Most Overvalued Housing Market in World [Chart] - Visual Capitalist
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Canada has the Most Overvalued Housing Market in World [Chart]

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Canada has the Most Overvalued Housing Market in World [Chart]

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.

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Map Explainer: Key Facts About Afghanistan

This map explainer looks at Afghanistan from a structural point of view, delving into geography and population patterns.

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afghanistan map explainer

Map Explainer: Key Facts About Afghanistan

The country of Afghanistan has a long and complicated history of domination by foreign powers and conflict between factions within the country.

While Afghanistan is well covered in headlines and news stories, the lion’s share of this coverage is directly related to conflict. As a result, Afghanistan is viewed by many in Western countries as a war-torn desert, with conflict, ideology, and geopolitical power obscuring more practical information about the country and its people.

In the Afghanistan map graphic above, we step back and examine Afghanistan from a structural point of view. How does its unique landscape influence population patterns? How does this geography influence the economy and relationships with neighboring nations? Let’s dive in.

Mountain High, Valley Low

Afghanistan’s rugged landscape is defined by towering snow-capped mountains, fertile valleys, and expansive deserts.

First, the country has a wide variety of climate extremes. There is more than 100ºC (180ºF) separating the record high and low temperatures.

The extremes don’t stop at temperature though. Afghanistan has the sixth-highest elevation span in the world, with 7,234m (23,734 ft) between its highest and lowest point. Afghanistan is one of 44 landlocked nations in the world, which helps explain why its lowest point is so much higher than sea level.

For those living in North America, the country’s terrain has been compared to Colorado, with Kabul sharing similarities with Denver.

Where Do People Live in Afghanistan?

Settlement patterns in Afghanistan are similar to other countries in the region; people cluster where there is access to fresh water.

As the cartogram below demonstrates, a large portion of the country’s population is located around Kabul, and the region adjacent to the Kabul River.

afghanistan gridded population cartogram

Source

The southwestern province of Nimruz is the most sparsely populated area in the country. The Wakhan Corridor—which connects Afghanistan to China—is also very sparsely populated, with about 14,000 total residents.

Key Facts About Afghanistan’s Demographics

Afghanistan has a very youthful population. The country’s median age of 19 years is one of the youngest in the world, and is low compared to its neighbors Pakistan (24) and Iran (30).

afghanistan demographic population pyramid

Islam is the official state religion of Afghanistan. 99.7% of the Afghan population are Muslim, one of the highest proportions of the 49 Muslim-majority countries.

So far in 2021, the OCHA estimates that 550,000 people in Afghanistan are “internally displaced” due to conflict, and this number may rise still as new data tracks the final days of the Taliban’s takeover of the country. The majority of those displaced persons are children.

Paving the Way

The Ring Road connecting Afghanistan’s major cities began in the 1960s but was soon cut short by war. After the U.S. took control in 2001, new road construction began in earnest.

Between 2002 and 2016, USAID and the Department of Defense (DoD) spent approximately $2.8 billion building and maintaining Afghanistan’s road infrastructure. This number doesn’t include additional investment from other sources that poured in to improve the country’s road network.

The result is a more comprehensive road network, but one that is difficult to maintain. A 2016 report found collapsed bridges and sections of road around the country that were washed out.

Resources and Relationships

Afghanistan is a critical source of fresh water for the arid region. Several major regional rivers flow from the country’s mountainous eastern provinces into neighboring countries, so any new irrigation schemes and dam infrastructure will come with a geopolitical price tag as well.

Already in the recent past, tensions have increased with Iran and Pakistan over the flow of water crossing the border.

Outside countries are also very interested in Afghanistan’s rich mineral resources. Decades of near-continuous conflict have made mining a tough proposition in the country, but with growing demand for resources such as lithium and rare earths, that may soon change.

afghanistan mineral production potential

Source

Afghanistan is estimated to have over $1 trillion of untapped mineral reserves, and outside interests are taking notice.

China said it was ready for “friendly and cooperative relations” with the new Taliban regime, and it’s possible that investment from China’s Belt and Road Initiative (BRI) may step in to fill the vacuum left by departing Western powers.

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Ranked: America’s Most Searched and Visited News Sites by State

American states have some key differences for their favorite news sites. Here’s how they rank by monthly visitors and state popularity.

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Ranked: America’s Most Searched News Sites by State

America is known to have significant distinctions at the state-by-state level, and data suggests this trend extends to popular news sources. To learn more, this infographic from SEMRush ranks U.S. news websites by search volume and popularity across U.S. states.

Here’s how the top 15 news sites compare when ranked by monthly visitors, as well as the number of states the news source is most searched for in:

 News SiteMonthly VisitorsState Search PopularityTop Metro Area
1Yahoo! News175 million12Eureka, California (CA)
2Google News 150 million3Eureka, California (CA)
3Huff Post110 million1Eureka, California (CA)
4CNN95 million7Bend, Oregon (OR)
5The New York Times70 million1Charlottesville, Virginia (VA)
6Fox News65 million11Glendive, Montana (MT)
7NBC News63 million3Charlottesville, Virginia (VA)
8MailOnline53 million1West Palm Beach and Fort Pierce, Florida (FL)
9The Washington Post47 million1Washington, DC and Hagerstown, Maryland (MD)
10The Guardian42 million1Juneau, Alaska (AK)
11The Wall Street Journal40 million1Charlottesville, Virginia (VA)
12ABC News36 million5Columbia and Jefferson City, Missouri (MO)
13BBC News35 million2Eureka, California (CA)
14USA Today34 million10Wausau and Rhinelander, Wisconsin (WI)
15Los Angeles Times32 million1Palm Springs, California (CA)

Political affiliation plays a large role in determining each state’s favored news sites. Blue states lean towards Google News and CNN, while red states overwhelmingly choose Fox News.

The Most Popular News Sites

Yahoo News is the most popular news website in America, bringing in a massive 175 million monthly visitors. In addition, they’re the most searched for news site in 12 states—the highest of any website. The company’s history has been a roller coaster ride and at different times Yahoo intended to acquire Google and Facebook. Both companies went on to be worth over $1 trillion each, while Yahoo shrank some 90% from when it was once worth $125 billion.

The New York Times has 60 million monthly visitors, but in recent years, has pivoted towards the coveted and trending paid subscription model. This decision is paying off well, as the site now has 6.1 million paid subscribers—more than any of its competitors. Consequently, the New York Times’ share price hit a record high in December 2020.

HuffPost, and their audience of 110 million, were bought by BuzzFeed from Verizon in November of 2020. The two organizations have some history together, as BuzzFeed co-founder Jonah Peretti was also one of the early founders of HuffPost.

CNN is seeing a fall in ratings ever since Donald Trump left office. By some measures has witnessed a 36% decline in primetime viewers in the new year.

Google News experiences 125 million visitors a month, ranking second overall. That said, they stand tall relative to their competitors by overall visits to their main site. Here, Google hits 92.5 billion monthly visits, while Yahoo experiences a more modest 3.8 billion. Unlike legacy media news companies, Google has managed to increase their market share of U.S. advertising revenues, due to more ads going digital.

The Modern News Landscape

Overall, the modern news industry has been a tough landscape to operate in. Here are some of the reasons why:

First, the internet has removed barriers to where people obtain information, and revenue streams have been disrupted in the process. The advertising business model of news organizations is cutthroat to compete in, and there has been plenty of consolidation and layoffs.

Lastly, trust in traditional news and media organizations has been declining amongst Americans, from nearly 60% to 46% since 2019.

YearA lot of Trust (%)Some Trust (%)Very Little/ No Trust (%)
1994353727
1996363924
1998344025
2000364023
2002354321
2004304029
2006314028
2008244331
2010224136
2012213938
2014184239
2016213840
2018203445
2020183349

To add to this, on a global basis, the U.S. ranks well below most major countries based on trust in news media.

Some organizations like The Washington Post and The New York Times have opted out of the advertising model, moving towards the direction of premium subscriptions. But only 20% of the Americans pay for their news, which could lead to stiff competition down the road.

The Future Of News

There are serious concerns about the future of news in the era of spreading misinformation. Up to 43% of Americans say the media are doing a very “poor/poor job” in supporting democracy. But despite this waning trust, 84% of Americans view news media as “critical” or “very important”.

What will the future of media look like throughout the 21st century and how will this impact the most popular news sites of today?

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