IMF warning on house prices sends sparks flying

The damage could be caused by even relatively small corrections, let alone full-blown market crashes, the IMF suggests. ”Even an orderly correction would clearly weaken growth in the countries in which it occurred; an abrupt price correction could have significantly more serious adverse effects.” Because of the magnitude of house price inflation since 1997 in markets such as the UK, Australia, Ireland and Spain, there is now a high probability of such market corrections occurring. The view has caused the National Association of Estate Agents to label the IMF “wrong”. It says the...