Housing markets in several developed countries around the world are showing signs of a tentative but growing stabilization, a Scotiabank report said Thursday.

People walk past new homes for sale in Oakville, Ont., in April. After some volatility, the Canadian housing market has stabilized, a Scotiabank report says. (Nathan Denette/Canadian Press)

Real home prices increased in the second quarter in Canada, Australia and the United States. While house prices continued to fall in the United Kingdom, France, Spain and other countries, the pace of decline slowed, the bank noted.

"Indeed, signs of a bottoming in home prices are likely now bringing some fence-sitters off the sidelines," Scotiabank economist Adrienne Warren said in a report released Thursday.

In many markets, housing valuation measures such as price-to-rent and price-to-income ratios suggest some overvaluation, she said.

In addition, excess production capacity will keep a lid on inflationary pressures for some time. That should allow central bankers to keep interest rates low, which should further support the housing market, the bank noted.

But the housing rebound will be constrained by a renewed focus on reducing debt and rebuilding household savings, Warren said. Another rein on prices will be that unemployment remains high and will be slow to decline so buyers will remain cautious.

The bank says the firmer house pricing is evidence of growing confidence in the sustainability of a global economic recovery that appears to be underway.