Commonwealth countries are experiencing a worrisome real estate bubble. Australia, Canada, the UK, and New Zealand have all seen property prices rise an average of 71 per cent since 2003, according to housing blogger Stephen Punwasi.

Since the economic meltdown of 2008, governments in these four countries have embraced low interest rates, which has let consumers carry more debt. That’s led to increasing real estate prices despite stagnating household incomes, soaring household debt, and tepid economic output. Here’s what each country looks like individually:

Canada

Housing prices have skyrocketed by 80 per cent since 2003, far outpacing income gains. The average home price is now six times the median household income, at CA$456,722 (US$348,403).

Australia

Home prices in Australia are up 65 per cent since 2003, to AU$623,000 (US$475,165). That figure outpaces the median income by nine times.

New Zealand

Taking the lead with an 84 per cent price rise since 2003 is New Zealand. At nine times the median income, the average home now goes for NZ$612,527 (US$443,797).

United Kingdom

Home price gains in the UK trail the others in this group, with an average price rise of 55 per cent. At £200,251 (US$260,064), the average home costs nine times the median household income.

property real estate

In addition, Sydney, London, and Vancouver are three of six cities worldwide that are furthest in “bubble” territory, according to economists at UBS Wealth Management. What’s driving such rapid gains? The Swiss bank released its 2016 Real Estate Bubble Index, and noted three main factors boosting housing prices:

  • Abundant foreign capital, with wealthy Chinese investing heavily in real estate in Vancouver and Sydney.
  • Loose monetary policy, as low-interest rates enable borrowers to bid up home prices.
  • Bullish expectations, as people see opportunity to make money until circumstances change and the bubble bursts.

At the same that housing prices are soaring, income gains have been meagre when adjusted for inflation, Punwasi noted. Workers in Australia gained 18 per cent from 2005 to 2015, while New Zealanders gained 15 per cent. Canadian workers saw gains of just nine per cent, and U.K. workers lost nearly 28 per cent.

This leads to the obvious question: how are people buying houses as prices are rising so dramatically? Low interest rates combined with freewheeling lending enabled people to qualify for mortgages and rack up debt. Australia leads here, with a debt-to-income ratio of 185 per cent. Canadians follow with a debt-to-income ratio of 165 per cent, then New Zealanders at 161 per cent, and the U.K. at 150 per cent.

This level of debt is, according to Punwasi, greater than the economic output of the four countries. The UK leads in this metric, with £2.788 trillion (US$3.62 trillion) of debt versus £1.896 trillion (US$1.44 trillion) in GDP. Australians owe $1.734 trillion (US$1,32 trillion) compared with GDP of AU$1.668 trillion (US$1.27 trillion). New Zealand looks a bit more balanced, at NZ$252 billion (US$182.78 billion) in debt compared to NZ$250 billion (US$180 billion) in GDP. Canadians’ debt stands at $1.973 trillion (US$1.5 trillion), against GDP of $1.896 trillion (US$1.44 trillion). All told, debt obligations total $6.622 trillion, outpacing GDP of only US$5.25 trillion.

Other data indicates that housing prices and sales, though still in “bubble” territory, may be stagnating in some cities. CoreLogic reported a 0.2 per cent drop in prices in the mainland state capitals. Previous years saw gains in the same timeframe saw gains of 1.3 to 2 per cent. The number of auctions was also down, at 2,405, compared to 2,858 last year, a 16 per cent drop.