FROM China to London, fast- rising property markets are haunting the global economy again - only five years after the US subprime mortgage bubble burst and triggered the worst financial crisis since the 1930s.
For now, house-price inflation is neither as high nor as widespread as it was in the middle of the last decade. Except in a few cases, the warning signals are flashing amber, not red, and several countries have acted to cool overheating markets.
But the confidence of
policy-makers that they can avoid another boom and bust could be tested if central banks keep pumping out nearly-free money to support economic growth by encouraging investment in riskier assets such as equities and property.
Plentiful cheap credit is just one more inducement to homebuyers who, in many countries, can deduct mortgage interest from their taxable income or are exempted from capital gains tax when they sell their house, said Andrew Oswald, a
professor of economics at Warwick University in England.
"We're stoking up a huge bubble. It's quite extraordinary. We virtually ruined the Western world by having high house-price inflation, and now we're determined to do it again," he said.
A simple measure of property market risk compares house prices with incomes.
Property prices rising at a higher rate than incomes indicates a bubble. While the
US price-to-income ratio at the end of 2012 stood at 84.3, the ratio in Canada was at a 10-year high of 131.7, according to the Organisation for Economic Cooperation and Development.
The picture in Europe is one of stark divergences.
Supply constraints, notably strict planning rules, are contributing to surging prices in London, where high-end property has been in demand from well-heeled foreign investors.
Prices in the capital rose 9.4pc in the year to
September, according to Land Registry data.
But in Ireland, as well as in Spain and Denmark, price-to- income ratios have slumped since the peak in 2006/2007. Prices have also been tumbling in the Netherlands because of uncertainty over the future of generous tax breaks.
There are even vast differences within national borders, and Ireland is a perfect example.
Only a few years after the decimation of Irish property prices, the Government is under pressure to ensure enough housing stock is released to avoid a Dublin- specific bubble.
The latest figures show that house prices in Dublin are rising faster than they were during the height of the boom.
And property experts say they expect further rises, with an annual increase of 20pc expected in Dublin before the end of this year. Yet in large swathes of the country, activity still remains flat.