The UK daily mail reports Investment Bank ABN Amro has warned of housing slump on a global scale due to soaring borrowing costs.
Families have taken on ‘unsustainably large’ mortgages, leaving them vulnerable to the sharp increases in bond yields and official interest rates seen in recent weeks, wrote economist Dominic White.
Although fears for the health of the US housing market have captured headlines, the degree of over-valuation is more ‘severe’ in Britain, Australia, Spain and Ireland, ABN Amro calculates.
This compares favorably with data from the OECD’s recent OECD Economic Outlook No 81 showing house prices are as much as 65% overvalued in the UK and 81% overvalued in Australia.
» ABN fears world housing crash – Daily Mail, 11th June 2007.