In contrast, no general trends of excessive rises in real estate prices have been observed.7 Government bonds have seen considerable appreciation, as the monetary expansion in advanced economies has contributed to downward shifts in and flattening of the yield curves in emerging economies.8 To the extent that extraordinarily loose monetary policies in developed countries are not a normal situation, it is reasonable to infer that emerging-market bonds are currently above their long-term values.
In this environment, there are clear indications of upside risks to price stability at medium to longer-term horizons. Therefore, monetary developments continue to require very careful monitoring, particularly against the background of the expansion in economic activity and still strong property market developments.