Politics
Canada has the Most Overvalued Housing Market in World [Chart]
![Canada has the Most Overvalued Housing Market in World [Chart]](https://www.visualcapitalist.com/wp-content/uploads/2015/05/canada-housing-bubble.png)
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.
Politics
Map Explainer: Key Facts About Afghanistan
This map explainer looks at Afghanistan from a structural point of view, delving into geography and population patterns.
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.
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).
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 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.
Politics
Ranked: America’s Most Searched and Visited News Sites by State
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