The U.S. Federal Reserve's massive bond-buying program to stimulate the U.S. economy has long sparked fears that it was inflating property prices. But now the Fed has started to wind down its purchases, concerns are rising that "tapering" could generate new risks for global property markets.
The Fed's $85 billion of bond purchases every month had pumped extra liquidity into the world's financial system. All these extra funds encouraged investors to pile into riskier assets – such as property.
This in turn contributed to dramatic house price rises across a number of emerging markets. In 2013, Indonesian house prices rose by 13.5 percent, Turkey's increased by 12.5 percent and Brazil's were 11.9 percent higher, according to global property consultancy Knight Frank's Global House Price Index.
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Liam Bailey, global head of residential research at Knight Frank, said one of the "unintended consequences" of the Fed's stimulus was a global risk of real estate bubbles.