Launched a year ago after the US housing market collapse, the World Economic Forum's Emerging Horizons on Real Estate – Asset Price Dynamics Initiative has just released two reports looking at whether we can avoid real estate asset bubbles around the world.

The globalization of real estate is accelerating in both commercial and residential sectors, the report states, and cross-border capital flows into real estate markets pose particular challenges for policy-makers because they "may require policy settings that conflict with other domestic policy objectives." This may explain the seemingly paradoxical position being taken by the Abbott government in declaring that Australia is "open for business," yet cracking down on foreign capital when it flows to the residential property market.

The first report, Profiles, Prescriptions and Proposals, provides a general analysis of the asset price dynamics topic from a real estate perspective. The second report, Executive Case Studies, describe real asset bubbles around the globe and attempts to extract lessons for the future.

“There is increasing evidence of frothiness in a number of housing markets in both advanced economies and emerging markets, including Canada, the UK, Switzerland, France, Sweden, Norway, China, Hong Kong and Singapore among others," said Nouriel Roubini, Professor of Economics and International Business, Leonard N. Stern School of Business, New York University, who was part of the World Economic Forum's annual meeting in Davos recently. "We’re also seeing early signs of overheating in a number of credit and equity markets across the world.”

A foreword by Luci Ellis, Head of Financial Stability Department at the Reserve Bank of Australia, says there has been a recent tendency by some economists to view all risks and instability through the prism of the US housing meltdown, but some of the case studies presented in the report "underline that commercial real estate – especially office property – is if anything more prone to painful busts than residential real estate." To view the Australian case study, which looks at Sydney's office real estate sector, click here.