The International Monetary Fund (IMF) has warned of a growing housing bubble in many parts of the world and urged policymakers to take immediate action to prevent another crisis.
It sounded the warning Wednesday as it unveiled new data showing home prices in many nations were well above their historical averages, Financial Times reported.
As home prices move up from already high levels, the sector has emerged as a major threat to economic stability, with countries making limited progress to keep them under control, according to the IMF.
House prices “remain well above the historical averages for a majority of countries” in relation to incomes and rents, IMF’s deputy managing director Min Zhu was quoted as saying in a speech released on Wednesday.
Tools for containing housing booms were “still being developed” but that “should not be an excuse for inaction”, he said.
In Canada, home prices were said to be 33 percent above their long-run average in relation to incomes and 87 percent above their long-run average compared with rents. The figures for the UK are 27 percent relative to incomes and 38 percent relative to rents, the report said.
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