UBS Global Real Estate Bubble Index: At the Tipping Point -- info suisse article (Swiss Canadian Chamber of Commerce)

SUISSE News Fall 2022
Banking / Financial

October 2022

UBS Global Real Estate Bubble Index: At the Tipping Point

According to the UBS Global Real Estate Bubble Index, Toronto and Frankfurt exhibit the most elevated risk levelson housing markets. For the study, UBS analyzed residential property prices in 25 major cities around the world. From mid-2021 to mid-2022, nominal house price growth in the cities analyzed accelerated to 10% on average. But the global housing boom is coming to an end.

Zurich, 12 October 2022–The UBS Global Real Estate Bubble Index 2022, a yearly study by UBS Global Wealth Management's Chief Investment Office, indicates that imbalances in global metropolitan housing markets are highly elevated and prices areout of sync with rising interest rates. Toronto and Frankfurt top this year’s index, with both markets exhibiting pronounced price bubble characteristics. Risks are alsoelevated in Zurich, Munich, Hong Kong, Vancouver, Amsterdam, Tel Aviv, and Tokyo.

In the US, all five analyzed cities are in overvalued territory with the imbalance more distinct in Miami and Los Angeles than in San Francisco, Boston, and New York. Housing markets in Stockholm, Paris, and Sydney remain overvalued despite some cooling trends. Other housing markets with signs of overvaluation include Geneva, London, Madrid, and Singapore. Sao Paulo–an addition to this year’s index–is fairly valued alongside Milan and Warsaw. Despite a buoyant year, Dubai’s housing market is in fair-value territory too.

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