The 2018 UBS Group’s Real Estate Bubble Index has been rolled out, which monitors housing and commercial real estate markets around the world and identifies the cities where properties are the most overvalued, thus posing a great risk of real estate prices collapsing in the coming months of years.
This year’s iteration ranked Hong Kong as the most overvalued city in its Real Estate Bubble Index, according to the organization’s report that examined 20 major cities around the globe. Five other cities were marked down as also being at risk, including Amsterdam, London, Munich, Toronto and Vancouver.
UBS Group said that it also found “major imbalances” in five other cities, including Frankfurt, Paris, San Francisco, Stockholm and Sydney. The Real Estate Bubble report included data on other cities that it considers to be overvalued, including Geneva, Los Angeles, New York, Tokyo and Zurich.
The organization’s researchers noted that property prices have increased dramatically recently, surging an average of 35% over the last five years in major cities around the world. UBS Group added that price bubbles in the real estate market are common, noting they represent “a substantial and sustained mispricing of an asset.”
“Although many financial centers remain at risk of a housing bubble, we should not compare today’s situation with pre-crisis conditions,” Mark Haefele, UBS Global Wealth Management CIO, said in a statement.
