The International Monetary Fund (IMF) has found Australia has the third highest house price-to-income ratio in the world.

The IMF’s Global Housing Watch says global house prices have risen consistently for nearly the past two years.

The fund says prices are “well above the historical averages” in countries including Belgium, Canada, Australia, Norway and Sweden.

While a recovery in housing markets around the world is welcome, the IMF says it is critical to avoid another unsustainable boom in house prices like the one that preceded the global financial crisis.

“In fact, our research indicates that boom-bust patterns in house prices preceded more than two-thirds of the recent 50 systemic banking crises,” IMF deputy managing director Min Zhu said in a blog post.

“While a recovery in the housing market is surely a welcome development, we need to guard against another unsustainable boom.

“Housing is an essential sector of every country’s economy and has systemic implications, which is why we at the IMF are focusing on it not only in individual countries but on a cross-country basis.”

The IMF is urging regulators, like the Reserve Bank and the Australian Prudential Regulation Authority, to move from “benign neglect” and take a range of steps to contain housing booms.

Mr Zhu said house prices were inching up, but questioned if it was a cause “for much cheer”.