Managing House Price Booms: Evolution of IMF Surveillance and Policy Advice

Abstract

This chapter describes the evolution of IMF monitoring-“surveillance” in the IMF’s jargon-of housing markets from 2008 to the present. It explains how the IMF has assessed overvaluation in housing markets and the advice offered on the policy tools needed to manage house price booms. The IMF’s ‘corporate view’ or ‘house view’ that macroprudential policies must be the first line of defense to deal with house price booms is laid out. The chapter also discusses whether the run-up in house prices over the past few years should be a source of worry. Lastly, the chapter describes how IMF surveillance has adapted as housing markets have become more ‘glocalized’ and developments at the sub-national level gain greater prominence.