The IMF has reiterated its warning that house prices in some countries including Ireland remain vulnerable if economic growth is outpaced by higher interest rates.
The latest warning about the property bubble is contained in the IMF's global economic outlook and is similar to the analysis offered in its mores specific assessment of the Irish economy published in August.
The IMF named a number of countries including Ireland, Britain, Australia and the Netherlands as exhibiting signs of a frothy property market at a time when their economies have slowed.
In a generally upbeat assessment of the global economy today the Washington-based institution said recovery is underway in the US and Japan but the risks remain most notably higher long term interest rates.
The IMF states "a further sharp rise in bond yields could adversely affect the recovery, particularly if that were not driven by expectations of higher growth."
Bond markets have become increasingly concerned about the ballooning US budget deficit which is expected to grow to $500 billion next year. This will put upward pressure on US interest rates as investors will demand a higher return from US treasuries to fund the deficit.
Because of the enormous influence of the US economy on the rest of the world the ECB would be forced to follow suit in an upward cycle of rate hikes to stem the flow of capital out of the euro zone.
Though economists, auctioneers and assorted pundits have long haggled over the sustainability of sky rocketing house prices the very specific circumstances as outlined by the IMF could at least moderate the market here.
The IMF warns that a scenario of higher interest rates in a sluggish economy means such an eventuality would "reduce the support that is presently being provided to demand ... and could increase the risk of a housing bust."