The International Monetary Fund (IMF) has warned that another housing crash could be afoot if governments do not take action against rising prices.
The Financial Times reported that the IMF has sounded a warning as it published new data that shows house prices are well above their historical average in many countries. They believe global housing is now emerging as a major threat to economic stability, particularly if countries do not move to quash the trend.
The IMF, headed by Christine Lagarde (pictured), said house prices are now at a level that could pose a significant risk to economies across the world, including Hong Kong and Israel. As an example, house prices in Canada are now 33% above their long-term average in relation to incomes and 87% above their long-term average compared with rents. In the UK this figure is 27% relative to incomes and 38% in comparison to rents, the Financial Times reported.
The trend doesn't hold across peripheral European countries, however, where in Greece they fell 7% on the year, 6.6% in Italy and 5% in Spain.