Via Oxford Economics today:
The elevated level of global house prices is showing signs of weighing on prices, with potentially negative implications for growth. Our set of cross-country risk indicators points to housing market dangers being especially acute in Sweden, Australia, Canada and Hong Kong. For most advanced economies, the absence of rising interest rates is supportive for housing, but sharp rate rises in some emerging markets since March could trigger price declines.
More at Bloomie:
Oxford said it compared markets across OECD countries from 1970 to 2013 and found a clear negative relationship. Where valuations had risen 35 percent or more above the long-term average over that period, real house prices fell 75 percent of the time over the following five years, it said.
Stretched valuations also matter because house price changes can have a significant impact on economic activity, Oxford said, citing a sample of 83 house price booms. It also found house prices tended to fall after booms, and often substantially.
Sourcing report as we speak…