Swings in housing market put central banks on guard

Five years after a financial crash that had its roots in a housing bubble, global policymakers are rapidly increasing the use of targeted lending curbs to head off destabilising booms and busts in the property market.

Authorities have introduced a range of non-monetary measures in the past year to dampen house price inflation and credit growth so borrowers and lenders alike are shielded somewhat when interest rates rise from historically low levels.

From Singapore to Sweden, from New Zealand to Switzerland, precautionary policy activism is gathering momentum.

Britain is debating whether a new housing bubble is inflating and what should be done about it, while Norway might become the latest country to require banks to hold more capital against home loans.

Given the post-mortems conducted into the origins of the crisis, policymakers are likely to keep rolling out such "macroprudential measures", according to Richard Fox, a senior director at Fitch Ratings in London.

"In those countries where you've still got a combination of rapid credit growth and strong property prices, there's been an increasing prevalence of these sort of measures," Fox said. "We haven't seen anything particularly drastic yet, but we're starting to see central banks trying to be a bit more innovative."