Global house prices are almost back to their previous peak as the world teetered on the edge of financial crisis almost a decade ago.
The latest data from the International Monetary Fund reveals home values are nudging the high last seen in 2007, but that the world has a multi-layered market moving at different speeds.
While house prices have risen the highest (12.5%) in Iceland over the past year, Brazil has seen them plunge by the most (22%).
The IMF Global House Price Index tracks how the values of houses and apartments move in 57 countries.
Prices have stood still or dropped in 18 countries. Over the past four years, the number of countries with rapid house price growth has doubled.
Brink of another crisis?
Local economic and political factors tend to impact national markets the most – for instance, politicians and the economy in Brazil have been in turmoil due to corruption allegations against leading figures in the government, while the strengthening dollar has badly hit the price of exports.
The IMF says the data is difficult to analyse to see if the housing market is back to where it stood on the brink of the credit crisis,
“The tentative answer is no,” say researchers.
“This time, it’s different but this is still a time for vigilance rather than panic.”
The IMF explains the housing boom is not synchronised across several countries, and even within nations, the boom is regionalised rather than spread across the whole country.
Bubbles and booms
Another factor is house prices are not fuelled by easy to access credit due to tougher restrictions on lending imposed on banks.
The IMF also points out that many countries are micro-managing their housing markets to keep the lid on bubbles that might lead to booms.
“Not only are there differences across countries, but the situation differs within countries. China offers a good example. While land prices overall have kept up a steady upward march, this masks tremendous variation at the city level. Beijing has “experienced one of the greatest booms ever seen in housing markets,” said Joe Gyourko, an expert at the University of Pennsylvania.