IMF Warns of Overheating in Asian Markets

The International Monetary Fund (IMF) has warned that many key real estate markets in Asia could be at risk of overheating unless action is taken. According to the body, increasing levels of speculative activity, rising vacancy rates in commercial units, mortgage credit growth and massive capital inflow points towards a worrying future for the sector....

The International Monetary Fund (IMF) has warned that many key real estate markets in Asia could be at risk of overheating unless action is taken. According to the body, increasing levels of speculative activity, rising vacancy rates in commercial units, mortgage credit growth and massive capital inflow points towards a worrying future for the sector.

Asia's economies including China should allow stronger and more flexible currencies to boost domestic demand and deter speculative capital inflows, the IMF added.

"Looking beyond the crisis, Asia's medium-term prospects depend on how successfully it is able to rebalance the drivers of growth, with greater reliance on domestic sources compared with external demand," the fund manager said in its World Economic Outlook report.

The comments come after the IMF claimed that the prospects for the global real estate sector were looking "dismal", with an economic downturn which could last for a further eight years.

- Monday 18 October 2010

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