The IMF has warned that housing prices around the world are trending above historical averages, and that some areas appear to be “overheating.”
In recent remarks, IMF deputy managing director Min Zhu said home price growth in developing markets has been robust, but now risks getting out of hand.
“For many emerging market economies in Asia and Latin America… mortgage credit and house price growth remain strong, and house prices in metropolitan areas show signs of overheating.”
Zhu also highlighted Australia, Belgium, Canada, Norway and Sweden as places were home prices have swung out ahead of rents and incomes, although the risk of a sharp correction differed country to country.
“While a recovery in the housing market is surely a welcome development, we need to guard against another unsustainable boom,” Zhu wrote in a follow-up blog Wednesday.
In its latest note, Global Property Guide, a real estate group, said that momentum from high-growth housing markets like the Philippines and Taiwan was now passing to New Zealand — which just raised interest rates — and Australia, as well as the Gulf and parts of Europe. GPG did note that interventionist policies in China and Singapore has helped cool those markets.
Still, they wrote, there is a global home price boom, and it is accelerating. “In fact, many housing markets are now considered overvalued.”
Here’s their table of Q1 price growth around the world. Some of the year-on-year figures are insane.
Let’s see what everyone’s learned when this happened last time.