The report also stated Australia, Sweden, Canada and Hong Kong are “especially acute”.
Assessing the Risks from High House Prices, the report compared housing prices across the Organisation for Economic Co-operation and Development, from 1970 to 2013, with genuine price growth across the next five years.
While a valuations rise of 35 percent or more above the long-term average over that period was revealed by the report, real house prices dropped by 75 percent.
“In all four, valuations are very elevated, there has been a lengthy housing boom, debt levels are high and there is a significant share of floating rate debt,” Bloomberg quoted Oxford lead economist Adam Slater as saying.
New Zealand was placed third in a list centred around housing debt as a percentage of gross domestic product.
“For most advanced economies, the absence of rising interest rates is supportive for housing, but sharp rate rises in some emerging markets since March could trigger price declines,” concluded the report.