Housing markets in a majority of OECD countries remain well above their historical averages, the International Monetary Fund (IMF) has warned.
The data was based on several of the most widely used measures.
In a speech originally delivered on June 5th, but released on Wednesday, IMF Deputy Managing Director Min Zhu highlighted the risks to economies from housing 'busts', particularly when real estate 'booms' coincide with rapid increases in the degree of leverage and exposure of households and financial intermediaries.
Additionally, the Washington-based lender's new global house price index, also released on Wednesday, showed that rising house prices are by no means a developed world phenomenon.
Within the OECD, valuation ratios "remain well above the historical averages for a majority of countries", the latest IMF report showed. "This is true for instance for Australia, Belgium, Canada, Norway and Sweden," Zhu stated.
In Canada, house prices are now 33% above their long-run average in relation to incomes and in the UK are 27% so. Meanwhile, Stateside house prices are still 13.4% below their long-run average.
The report goes on to run through the effectiveness of the current tool-kit available to policymakers, which consists of three types of tools: microprudential, macroprudential and monetary policy.
Not surprisingly, many of the specific policy options available read like a summary of recent speeches by various members of the Monetary Policy Committee and politicians.
It may also be worth noting that the IMF´s findings on the effectiveness, under certain circumstances, of applying tools such as a stamp duty.
As regards macroprudential tools IMF research found that loan-to-value (LTV) ratios are somewhat effective in cooling off both house prices and credit growth in the short run.
However, imposing stricter capital requirements on loans to specific sectors, such as real estate, has shown a mixed ability to curb credit growth.
Macroprudential tools may bot be effective either when a boom is driven by a shortage of housing or by increased housing demand from foreign cash inflows, the international body said.
In such cases an option may be to impose a stamp duty as Hong Kong SAR and Singapore did.
Lastly, and as regards to using interest rates to cool prices, given that a surge in house prices often comes alongside a "generalised private credit boom", then in many cases monetary policy might be "an important tool" in support of macroprudential policies.
"It is true, however, that in many relevant cases at the moment, policy interest rates have to remain low to support economic recovery," Zhu concluded.