How to compare two property markets across countries

Cross-border comparison fails in a familiar way. A price, a rent, or a yield from one country is set beside the same word from another, and the lower number is treated as the opportunity. The words are not the same object. This is a method for putting two markets next to each other without pretending they share a scoreboard.

Start with the legal object

The first question is what a buyer can actually hold. Freehold land, a lease of a stated term, a strata unit inside a foreign-ownership ceiling, and a contractual right in a development are four different claims. A lower price on the stricter claim is not a bargain against a cleaner title. Foreign-ownership rules are local. They belong in the comparison before the kitchen does.

Then the occupier

Two apartments can look alike and serve different weeks. One is let to people who work in the city. The other is sold to people who visit. Employment, household formation, universities and short-stay rules do not average into one ‘demand’. The OECD’s housing work exists because countries measure access, tenure and cost differently. Using one country’s rent-to-income story as if it described the next country skips that.

Prices need a series, and the series has a method

The BIS selected residential property price indicators are an attempt at a comparable set: for many economies, a national series covering the market the compiler treats as representative, in nominal and real terms. The detailed set, which the selected figures are drawn from, still differs by country in frequency, property type and area. A reading of two countries starts by reading those notes. It does not start by converting two asking prices at today’s exchange rate and calling the result value.

A workable order

• What is the title, and who may hold it?
• Who occupies the building on an ordinary week, and under what contract?
• What costs sit between rent and cash, including tax and the building?
• In which currency are the rent, the debt and the owner’s spending?
• Who would buy the exit, and how long does that take when credit is tight?
• Which official series, if any, actually covers this stock?