The Unassuming Economist

“Property prices have continued to fall from their crisis peaks, in part because Russian buying has fallen”, notes the IMF’s report on Montenegro.

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“After a long period of rapid growth, house prices have stabilized since 2013. A sharp reversal could have a significant impact on consumption, even if banks’ exposures could be managed (…). However, staff analysis does not suggest a major overvaluation, as past price trends were broadly in line with borrowing cost, demographic and income developments”, according to the IMF’s new report on Belgium.

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A new IMF “paper focuses on income inequality in Asia, its drivers and policies to combat it. It finds that income inequality has risen in most of Asia, in contrast to many regions. While in the past, rapid growth in Asia has come with equitable distribution of the gains, more recently fast-growing Asian economies have been unable to replicate the “growth with equity” miracle. There is a growing consensus that high levels of inequality can hamper the pace and sustainability of growth. Read the full article…

“Given still strong credit growth and rapidly rising house prices, the RBF should adopt macroprudential measures to tame the credit and housing price momentum, including through the use of loan-to-value ratios”, says IMF report on Fiji.

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“Housing markets have decelerated somewhat since mid-2014, but significant pressures remain. (…) Persistent upward pressure on house prices partly reflects supply constraints. (…) High house prices result in some households taking on high leverage, posing financial stability risks. (…) Further macroprudential tightening may thus be needed if the reduction in high leverage mortgages does not continue”, says the IMF’s new report on the United Kingdom.

A separate IMF paper examines how tax reforms could help ease structural supply constraints in the UK’s housing market.

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