The Real Deal New York

Bubble risk: Watch out if you’re investing in one of these eight cities

Swiss bank UBS says these markets are displaying telltale bubble signs
October 01, 2017 11:01AM

UBS’ annual Real Estate Bubble Index uses historical and current data to locate possible global housing bubbles. In 2017, there are eight bubble risks. (Pixabay)

UBS’ annual Real Estate Bubble Index is out and the Swiss bank is highlighting eight cities where bubbles are in full, voluptuous form.

Of course, price bubbles cannot be definitively proven until they burst — hindsight in real estate, like life, is 20/20 — which UBS notes in the report, but based on historical data the dissonance between income and rent, and property prices in these cities, along with excesses in construction and loans, the bank has concluded these markets are displaying the telltale bubble signs.

UBS’s data found cities’ in the top eight of their index experienced an average home price increase of about 50 percent since 2011, compared to non-bubble risk cities whose home prices increased about 15 percent.

From the lowest risk to the highest, here are the top eight cities that made UBS’ annual Bubble Index:

8. Amsterdam

(Wikimedia Commons)

7. Hong Kong

(Flickr/Loïc Lagarde)

6. London


5. Sydney


4. Vancouver


3. Munich

(Stefan Kühn)

2. Stockholm

(Benoît Derrier)

1. Toronto

(Wladyslaw/Wikimedia Commons)

[UBS] — E.K. Hudson