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OECD predicts worldwide property bubble burst

Staff Writer |
The Organisation for Economic Cooperation and Development (OECD) has issued a warning that global property prices could overheat and eventually drop.

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The think tank was monitoring "vulnerabilities in asset markets" amid predictions of higher inflation and the possibility of diverging monetary policies next year.

OECD's chief economist Catherine Mann said that countries like Canada and Sweden are particular cases for concern with prices being"very high" and "not consistent with a stable real estate market".

The organisation also pointed out that the UK real estate market may be face price correction soon, with London's current property prices through the roof.

"We've already started to see some changes in real-estate prices in the UK," said Mann.

She added that falling house prices post the Brexit vote would be positive for the UK if the change is borne mainly by foreign investors.

"Interesting in terms of the implications for the UK economy is who bears the burden - who bears the adjustment cost. If it's a non-resident then lower house prices could actually be good for the UK," she told The Telegraph.

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