![]() ![]() Note: The Real Estate Bubble Index does not currently include cities in Mainland China. Residential prices have trended down for the past six years and are now down nearly 40% from 2014 levels. Meanwhile, Dubai is listed as “undervalued” and is the only city in the index with a negative score. In fact, over the past three decades, residential home prices in Canada grew at the fastest rates in the G7.ĭespite civil unrest and unease over new policies, Hong Kong still has the second highest score in this index. ![]() Despite efforts to cool down these hot urban markets, Canadian markets have rebounded and continued their march upward. In the former, nearly 30% of purchases in 2021 went to buyers with multiple properties, showing that real estate investment is alive and well. Two Canadian cities also find themselves in bubble territory: Toronto and Vancouver. Germany’s financial hub has seen real home prices rise by 10% per year on average since 2016-the highest rate of all cities evaluated. With this in mind, which global markets are exhibiting the most bubble risk? The Geography of Real Estate BubblesĮurope is home to a number of cities that have extreme bubble risk, with Frankfurt topping the list this year. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making. Even so, there are some signs to watch out for.Īs one example, a decoupling of prices from local incomes and rents is a common red flag. Reading the Signsīubbles are hard to distinguish in real-time as investors must judge whether a market’s pricing accurately reflects what will happen in the future. The map above, based on data from the Real Estate Bubble Index by UBS, serves as an early warning system, evaluating 25 global cities and scoring them based on their bubble risk. After all, even though many of us “know a bubble when we see it”, we don’t have tangible proof of a bubble until it actually bursts. Identifying real estate bubbles is a tricky business. ![]() Ranked: The World’s Biggest Real Estate Bubbles in 2021 ![]()
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