House price warning

New Zealand's house prices have been ranked the most overvalued in the developed world behind only Hong Kong.

The New Zealand housing market was also deemed to be the fifth most at-risk among OECD nations, according to an Oxford Economics report.

The report considered New Zealand's house prices to be overvalued by a rating of 179 in its valuation index, with only Hong Kong rated higher at 203.

Canadian house prices were overvalued by a rating of 173, with Australia's rating sitting at 160.

Sweden was ranked the most at risk OECD housing market, followed by Australia, Canada and Hong Kong.

“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,” Oxford lead economist Adam Slater told Bloomberg.

Switzerland's housing debt to GDP ratio of 121 per cent was the highest among the list of the 10 most at-risk housing markets, with Australia next with a ratio of 115 per cent.

New Zealand's housing debt sat at 89 per cent of GDP, according to the report.

The report compared markets in OECD nations from 1970 to 2013 and warned that a pattern had emerged showing significant housing slumps typically followed boom periods.