The housing prices are bloated: IMF data predicts the bubble to burst soon
In several large economies like the UK, UK and Europe, the overvalued real estate markets had brought down the market and created the recession. This financial crisis had rocked the world economy and slowed down the growth in industries and affected the GDP negatively.
A senior official at the International Monetary Fund (IMF) has now warned that the real estate market is very volatile now and the housing bubble may burst anytime. He also mentioned that the policymakers need to act quickly and avoid a tragic repeat of the previous housing market crash in 2008. Due to the overpricing of the properties, the market was flooded the world with cheap money which had resulted in economic collapse in September 2008.
The latest data from the multilateral lender IMF shows that the housing prices are above historical averages in many countries which should ring an alarming bell to the policy makers in those countries. India is an exception, with housing prices in the last quarter of 2013 around a tenth less than the levels in the same three months of the previous year. A local housing price index developed by the National Housing Bank shows that prices are decelerating, the buyers need to be wary about the actual valuation of the property and not to fall prey to the gimmicks of the developers who are trying to push their ready to move in inventory.
Source- Mint
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