The chart on the left by The Economist compares house prices to rents in Spain, Britain, and the US.

Taken at face value it suggests that property is still most over-valued in Spain, at least in relation to rental income.

The problem with the graph as far as Spain is concerned is that The Economist uses official house price figures that, as regular readers of this blog will know, are detached from reality.

If it were possible to use an index of real transaction prices in Spain today, Spanish property wouldn’t look so over-valued.