Australian Analysts Sells Oranges as Apples

Re: http://www.businessspectator.com.au/bs.nsf/Article/House-price-to-income-ratios-pd20090421-RAV6W?OpenDocument

Christopher Joye of Australia's Business Spectator blog objects to comparisons of international house price indexes in his zeal to deny that Australian house prices are over-valued. He goes on to use what he refers to as an OECD international comparison of “house price to income” ratio. In so doing, he violates his own dictum.

That is just the beginning. What Joye calls a “house price to income” ratio is no such thing. As the OECD source document indicates (Reference: http://titania.sourceoecd.org/upload/1208051etemp.pdf, Table 1.2), the cited index measures the latest level “price-to-income ratio” relative to the “long-term average,” and that in comparison to the United States. This is not remotely the same thing as a price-to-income ratio, such as the Median Multiple (median house price divided by the median household income), which we use in the Demographia International Housing Affordability Survey. Calling something an apple does not make it an orange.