Some Troubling Housing Market News from Abroad

While the U.S. and several other countries are in the throes of a housing recession/depression following the great bubble, housing markets in countries where the economy is still relatively sound–Australia, China, Canada–seem to still be in bubble mode. Indeed, word from my in-laws in Israel is that the housing market there, which wasn’t bubbly earlier in the decade, has gone rather crazy. For example, the value of my sister-in-law’s apartment in Ramat Gan has more than doubled in shekels over the last two years, and has approximately tripled in dollar terms since she bought it several years ago.

This suggests to me that despite Keynesian worries about inadequate government stimulus, there is in fact still far too much liquidity thrashing around the global economy. But I’m no economist, and would be interested to hear others’ views on how and why housing bubbles in other countries are coexisting with international economic recession and deflationary pressures.