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

The Kiwi 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.

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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 said according to 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.

Hong Kong house prices have been ranked the most overvalued in the developed world by an Oxford Economics report. Photo / Supplied
Hong Kong house prices have been ranked the most overvalued in the developed world by an Oxford Economics report. Photo / Supplied

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 on from boom periods.

According to Bloomberg, the report found that when valuations had risen 35 per cent or more above the long-term average during the 43 year period, real house prices then fell 75 per cent 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: the scope for a further house price 'melt-up' in highly valued markets looks extremely limited," Slater said.

The report comes as New Zealand's median house prices increased 3.6 per cent year-on-year in August to $549,000, according to the Real Estate Institute of NZ.

Auckland median prices also rose 1.4 per cent in August to $852,000, the city's first year-on-year increase in six months.

Above average temperatures in the final month of winter "had a positive impact on the real estate industry with prices increasing in 14 out of 16 regions across the country", REINZ chief executive Bindi Norwell said.