Latest data shows almost every major economy is seeing a boom in housing prices, but economists have continued to express concerns on the potential threat this poses to financial stability.

The COVID-19 pandemic is cited by economists as fueling the broadest global house price boom in two decades, which they say has come on the back of governments' fiscal stimulus programs, low interest rates and buyers drawing on extra savings accumulated during lockdowns.

Analyzing data shared by the intergovernmental Organization for Economic Cooperation and Development, or OECD, the Financial Times found just three of 40 countries covered saw house prices falling in the first three months of this year.

Claudio Borio, head of the monetary and economic department at the Bank for International Settlements, the bank for central banks, told the newspaper that in the short term such growth can be "a good thing for the economy", but warned that an unsustainable boom could eventually push activity "into reverse".

Among the richest nations covered by the OECD, house price growth hit 9.4 percent in the first quarter of 2021, as economies rebounded from pandemic-triggered recessions.

But as housing demand has increased, costs of materials such as timber and steel have risen rapidly, the Financial Times said.

The newspaper quoted Brett House, deputy chief economist at Canada's Scotiabank, who warned of an imminent "structural supply-demand imbalance that is only going to heat up".

Added reliance

Last month, a Reuters report on the British property market noted that over the past 50 years, there has been a relationship between house prices and the contribution of trade to economic growth.

It said that the housing market helps to drive consumer confidence and household spending, boosting demand for imports, and that this "adds to Britain's reliance on foreign investors to fund its balance of payments deficit".

But the market also has the "potential to crowd out manufacturing... which is crucial to exports", the report noted.

Balazs Egert, senior economist from the OECD, described the relationship between the housing market and trade as similar to "Dutch disease"－when a booming sector, often linked to the discovery of a commodity such as oil, "drains resources from other sectors to the detriment of the overall economy".

"If you have a housing boom, this will (put a) brake on export performance in an average country in which we observed this kind of boom in the past," said Egert.

"Looking at the 1990s and 2000s, then it's probably fair to say that if you have a booming construction sector and real estate sector, then certainly they're not very helpful for the manufacturing sector."