The sharp rise is real estate prices is a serious problem. What is it due to?
When real estate prices rise markedly faster than wages, the situation of households that buy or rent a home deteriorates, once spending on housing has been deducted from their disposable income, it declines. Among the large OECD countries, this abnormal rise in residential real estate prices has been seen for 20 years in Canada, Australia, the United Kingdom, the Netherlands, Sweden and France. What can this be attributed to? It can be due to: Either a shortfall in construction (Canada, Sweden); Or very low long-term interest rates (Canada, Australia, Sweden); Or rapid growth in mortgage loans ( the six countries).