patrick.net

Wow, I just moved from Vancouver where I thought real estate was outrageous from 700-1200/sf in my old neighborhood. Guess these other cities have even that beat by a mile. I wonder though how salaries stack up in comparison and how the income to real estate price/sf ratio compares...

I remember seeing a Jewish family moving from NYC to Jerusalem... On one of those HGTV shows....I know its a "holy land" and all but she bought a 2 million dollar FIXER!!! That would have cost half the price in L.A., those HGTV shows showcasing homes overseas always made US real estate look like a bargain.

http://en.wikipedia.org/wiki/Housing_bubble

2007: many countries

As of 2007, real estate bubbles had existed in the recent past or were widely believed to still exist in many parts of the world,[6] especially in the United States, Argentina, Britain, Netherlands, Italy, Australia, New Zealand, Ireland, Spain, Lebanon, France, Poland, South Africa, Israel, Greece, Bulgaria, Croatia, Norway, Singapore, South Korea, Sweden, Baltic states, India, Romania, Russia, Ukraine and China

The Economist magazine, writing at the same time, went further, saying "the worldwide rise in house prices is the biggest bubble in history".

Real estate bubbles are invariably followed by severe price decreases (also known as a house price crash) that can result in many owners holding. As of the end of 2010, 11.1 million residential properties, or 23.1% of all U.S. homes, were in negative equity at Dec. 31, 2010.Commercial property values remain around 35% below their mid-2007 peak in the United Kingdom. As a result, banks have become less willing to hold large amounts of property backed debt, a likely key issue in affecting a recovery worldwide in the near term

For individual countries, see:

Australian property bubble
British property bubble
Bulgarian property bubble
Canadian property bubble
Chinese property bubble
Danish property bubble
Indian property bubble
Irish property bubble
Israel's housing bubble
Japanese asset price bubble
Lebanese property bubble
Polish property bubble
Romanian property bubble
South Korean property bubble
Spanish property bubble
United States housing bubble
Greek property bubble

From our founding, land and a solid home upon it, has been an American obsession, bordering on a mass psychiatric disorder. People in other countries put their money wherever they believe it can do them the most good, even if that means renting. Americans choose home ownership over nearly everything else, every time. As a result, we have more stock and thus greater supply than other countries, even in places like NYC and San Fransisco.

Whatever happens in the US housing market, this isn't going to go away. Americans may accept the reality of renting, but they'll be secretly saving for a home the moment their debt is paid down sufficiently. It's like telling a Pashtun that honor killing is a bad thing. It's an out of control cultural ideal that isn't going to go away in a single generation.

Lima can look like a modern Utopia, or it can look like a deprecated Slum, let's just say most of it is the later. Lots of red brick structures that look like Legoville. Against the roads you can see huge hills that are about a thousand feet up, with these half finished or falling down brick structures, many with nothing more than tin sheets spread out over the top for a make shift roof. Some are just sticks and tarps. Water comes from a central well, and electricity is more like an extension cord ran from shack to shack.

My wife and I walked up one of those neighborhoods to visit a cousin of hers, across from her humble abode, was a pile of bricks nestled between the walls of the neighbor. It was brick rubble lot, that was about 25 feet by 25 feet. My wife asked her cousin how much is the guy selling it for.
$35,000.00 that's American dollars not in Peruvian Soles which is 1/3 of our currency.

I can by 1/4 acre lot in South Florida for less than that. A completed 1 br Condo for 27K.

So all in all, I do have to agree, that American real estate though some may think it's high, we're cheaper than a lot of the world.

Without knowing where these numbers came from and what exactly they describe, I'd be careful about taking this study too seriously. They cite a lot of different sources, and there's no evidence the methodology is consistent for all cities (e.g. downtown vs. where foreigners live vs. metro area). For example, 1BR and 3BR flats in London are far cheaper than Credit Sesame's stated number even when you convert from pounds to dollars:

http://www.guardian.co.uk/business/2010/may/30/housing-shortage-london-south-east

For example, the average price per square foot for a one-bed flat dropped from £565 in 2008 to £520 last year, while the price for a three-bed flat has gone up from £550 to £615.

And I'm not clear if that's Central London, London + inner Boroughs, or what.

Don't you think it's highly suspect that Paris is 2X London? That doesn't even pass the smell test.

What this probably did is compare data across various measures, e.g. metro area for Chicago (Chicago city is huge) vs. say expensive areas of other cities in some cases. We won't know without the data.

There are organizations that report on the most expensive cities for foreigners. African countries always show up in the top 5 because it's damn expensive to live in a safe area where most foreigners or ambassadors would live. There's no way in hell Mumbai is $664/sqft across all of Mumbai. Mumbai has slums galore. They have slums bigger than most US cities (Dharavi has 800,000 people!).

The "data" behind this article is just plain wrong.

1. The prices quoted for foreign cities are for the most expensive buildings in the entire city.

2. The foreign cities selected are capitals, nothing like Houston, Texas.

3. The prices quoted for 2nd tier US cities like Houston are for the lowest price houses in the entire metro are.

This whole article is just bullshit. Look up the data yourself.

justme says

This whole article is just bullshit. Look up the data yourself.

They are all bubble prices.

Singapore and Hong Kong are very small to begin with

This information makes a few presumptions

1) that everyone can afford to buy at these prices. In some regards that cannot happen. In Mexico supposedly there is a law that foreigners cannot buy property within three miles of coastline.

2) In some of these countries if you don't know the language and the customs you will get ripped off easily. Moscow is now one of the worlds most expensive cities (used to be cheap). If you don't know Russian I'd highly recommend a decent translator (someone you know that speaks it) or you'll be robbed on prices

3) There are districts within a city that can stand out. In Beruit there was a civil war that last 15 years. There are still many buildings even 20 years after it ended that still have bullet holes. Places that were "safe" were more desirable and if you could not leave it only led to the values of safe places going up and up. Just like one business in the middle east that is decent to get into is construction. So much conflict nearly assures work will be there to rebuild. With Tehran they don't mention that flying within Iran is pretty dangerous. Since 1979 they've been jerry rigging up old planes..it is to planes what Cuba is to US cars. The only real safe way is to fly to a place close and then drive but that's a long trip.

Based on my eyeball test, here are my thoughts.

London is more expensive than France. Tokyo went from out of this world expensive to still one of the top 10 most expensive market in the world.

With the execption of Manhattan New York, the US home is a lot larger than anywhere in this world on average, thus $$ per square feet may be a little misleading. If you have ever been to IKEA (Sweden Company), they have showrooms showcasing entire house at 420 Square feet and the furnitures are designed accordingly. That's how it's like in most places on the map not in the US.

Hong Kong and Singpapore are also places where 50-60% of the population lives in public housing so there is a structural difference. With that in mind, developers can't make private housing like public housing. In other words, they build them a little differently because they have to give significant value over free housing or why bother.

The $$ per square feet in the above is accurate, the worst part is 20-30% of the square feet that you have to pay full price is common area. (your portion of elevator, halls) So a 800 Square foot condo in San Franccisco is more like 1100 square feet in $$$ in Hong Kong.

In the US, when you buy you own the land forever (with very limited exclusion), thay may not be the case anywhere else where the government may require you to repurchase again after X amount of years.

It's definitely different, but when it is all said and done, US homes are definitely cheap in comparision.

no one said that the credit orgy was not a global epidemic, cheap and easy megaloans means bubble prices. For every investor paying cash, their are tens of 'normal' people taking on mega loans that will fallow their grandchildren. It all fits into the pathetic one dimensional actions of the central banks to funnel all the worlds wealth into the pockets of an elite few, while reducing everyone else to serfs.

End of story.

Yeah, yeah, yeah. But where can one live absolutely free? I mean, where can a person pay $0 per square foot? The problems the occupiers are having makes me wonder why homelessness has been criminalized -- but it also has me wondering where can one find the ultimate deal.

This graph seems to be missing something and has a lot of simply false information. I've been to Europe, their real estate has dropped a lot and is dropping at a much faster rate. With the money I have I can't afford prime location in Los Angeles, but in Europe I can have a mansion for the same money...

And don't compare the most luxurious downtown areas to the ghettos overseas either where they'll pay you to live (like Alaska out here). It's not apples to apples. Compare places where people actually want to be and where jobs are.

justme says

The "data" behind this article is just plain wrong.

1. The prices quoted for foreign cities are for the most expensive buildings in the entire city.

2. The foreign cities selected are capitals, nothing like Houston, Texas.

3. The prices quoted for 2nd tier US cities like Houston are for the lowest price houses in the entire metro are.

This whole article is just bullshit. Look up the data yourself.

I agree with this.

I think this is a bit misleading. Mainly because we in the US have a sort of "Relief valve" when it comes to high-priced real estate: If the prices are too ridiculous, a lot of folks simply say screw it, I'm moving to Houston/Atlanta/Nashville/Austin or whatever cheaper city that's out there. Some of these super high priced areas don't have that same dynamic.

Another is the economic situation. There are many choices city-wise in the US in regards to where you can live and have a career. Not so elsewhere. I know someone from New Zealand, which is one of those super bubble countries. Anyway, there's only one major city: Aukland. So if you're a college educated, entrepreneurial sort of person then your choices are limited.

Lastly, it would be good to see what sort of lending situation and government involvement exists in some of those countries. That too could be a big contributing factor.

Not going to be so cheap if we have to go back to Clinton's tax rates.

Or we stop getting $500B/yr in free stuff from the world.

Don't forget to consider the currency exchange rates and the wages versus real estate prices versus wages of the local currency. If you convert London's average price per sq ft to British Pounds, it would be £950 per square foot. The average household income in London is £44000. Also consider the average income varies widely in London.

Yeah, it is dirt cheap but it is still going to get much cheaper.

edvard2 says

think this is a bit misleading. Mainly because we in the US have a sort of "Relief valve" when it comes to high-priced real estate: If the prices are too ridiculous, a lot of folks simply say screw it, I'm moving to Houston/Atlanta/Nashville/Austin or whatever cheaper city that's out there. Some of these super high priced areas don't have that same dynamic.

Because other countries don't have rural areas????

$79/sq ft in Phoenix is way, way too much. More like $50 and dropping still.

To get a good sense of real estate prices overseas, I sometimes watch House Hunters Internationl and some of the prices are insane. The Scanvanadian countries are super expensive. In Holland, they are buying house BOATS for more than what most people in the U.S. pay for houses. Switzerland is super expensive too.

"Today, prices in Coyoacán, Polanco and other affluent neighborhoods that appeal to foreigners start at $200 a square foot" - NYT

You find me an "affluent neighborhood" in Los Angeles where properties are going for $200 a square foot.

http://www.nytimes.com/2009/04/08/greathomesanddestinations/08gh-sale.html