In Frankfurt and Toronto – the two cities with the highest risk scores in last year’s edition – real prices tumbled by 15% in the last four quarters. On average the cities lost most of the real price gains made during the pandemic and are now close to mid-2020 levels again.“ Claudio Saputelli, Head of Real Estate at UBS Global Wealth Management’s Chief Investment Office, adds: “In inflation-adjusted terms, prices are actually 5% lower now than in mid-2022. Annual nominal price growth in the 25 cities analyzed came to a standstill after a buoyant 10% rise a year ago. House price growth has suffered due to rising financing costs as average mortgage rates have roughly tripled since 2021 in most markets. This also applies to Singapore and Dubai, even though their reputation as geopolitical safe havens has recently triggered a surge in demand for both renting and buying. These housing markets are now fairly valued, according to the index, as are Milan, São Paulo, and Warsaw. Similarly, New York, Boston, San Francisco, and Madrid have experienced a drop in imbalances. Unchanged from the previous year, housing markets in Miami, Geneva, Los Angeles, London, Stockholm, Paris, and Sydney also continue to be overvalued. Formerly in the bubble risk zone, Toronto, Frankfurt, Munich, Hong Kong, Vancouver, Amsterdam, and Tel Aviv, are now all in the overvalued territory. In this year’s edition, only two cities – Zurich and Tokyo – remain in the bubble risk category, down from nine cities a year ago. ![]() ![]() Zurich, 20 September 2023 – The global surge in inflation and interest rates over the past two years has led to a sharp decline in imbalances in the housing markets of global financial centers on average, according to the UBS Global Real Estate Bubble Index 2023.
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