TWO major financial institutions have sounded a warning bell over fears that several key property markets could overheat and collapse. Both Barclays and the Organisation for Economic Co-operation and Development (OECD) have painted a stark picture of the potential threat.
A recent OECD report has identified Sweden and Canada as the unlikely candidates facing the greatest risk of a housing crash in 2017.
Extremely high and artificially inflated prices of both residential and commercial properties is the culprit.
House prices in Canada have practically doubled since the year 2000, while Sweden was aptly described as ‘skating on thin ice.’ Economists worry that the rapid rise is courting an abrupt correction that could affect millions of households.
Barclays has drawn up a similar chart of the European countries it perceives as running the greatest risk of sudden fall. It bases its findings on the European Systemic Risk Board’s (ESRB) findings.
The figures indicate that Sweden and Luxembourg have the most fragile bubbles, closely followed by the UK, Austria, Belgium and Finland.
All countries have received an official warning from the ESRB. Spain has one of the lowest risk levels on the chart, faring far better than Germany, Ireland and France.