Poorly managed housing markets played a key role in triggering the recent global financial crisis and may be slowing the recovery, according to a new OECD study which offers governments a roadmap for sounder housing policies.
The OECD notes in its study that easy credit over the past two decades amplified price volatility, with real housing prices jumping 90% or more in Australia, Belgium, Finland, Ireland, Netherlands, New Zealand, Norway, Spain and the United Kingdom. OECD also points out that deregulation and innovation in mortgage markets – coupled with inadequate supervisory frameworks – contributed to a significant relaxation in lending standards, an increase in non-performing loans and the sub-prime crisis.
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