New Zealand is ranked fifth in a new report on the world's most at-risk housing markets.
Oxford Economics says Australia, Sweden, Canada and Hong Kong are "especially acute".
"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 said according to Bloomberg.
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The report, Assessing the Risks from High House Prices, compares housing prices across the OECD from 1970 to 2013 with real price growth over the following five years.
It found when valuations had risen 35 percent or more above the long-term average over that period, real house prices fell 75 percent of the time over the following five years.
"This points to many OECD countries seeing stagnant or negative real house price growth in the next few years," Mr Slater said.
Out of the ten most risky housing markets New Zealand had the highest increase in real prices over five years at 43 percent.
For 'overvaluation' it was ranked second behind Hong Kong with 179 on a valuation index where the long-term average is 100.
The study said stretched valuations matter because house price changes can have a significant impact on economic activity.
New Zealand was in third place when looking at housing debt as a percentage of GDP, which was 89 percent.
"For most advanced economies, the absence of rising interest rates is supportive for housing, but sharp rate rises in some emerging markets since March could trigger price declines," the report says.