UBS’s 2024 Global Real Estate Bubble Index shows that the risk of a bubble has declined over the past 12 months. Currently, only six cities are at high or high risk, down from 16 cities last year. The two U.S. cities at highest risk of housing bubbles are Miami and Los Angeles, the report said.
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UBS released its 2024 Global Property Bubble Index report last week, showing that the risk of a bubble has generally declined over the past 12 months.
Last year, 16 cities around the world were considered to be at high or high risk of a property bubble, but only six currently have that status, the report said. This is because house prices have fallen in many cities and are expected to rise excessively by 2023.
The report’s authors, Claudio Saptelli and Matthias Holzhei, said: “Inflation-adjusted house prices in the cities analyzed are now lower than they were in mid-2022, when global interest rates began to rise sharply. They are down about 15% on average.”
“The cities that recorded the most severe price corrections were those that had a high risk of real estate bubbles in the past few years,” they continued. “Real prices in Frankfurt, Munich, Stockholm, Hong Kong and Paris are more than 20% below their post-pandemic peak.”
To create the index, UBS considers the local house price-to-income ratio, price-to-rent ratio, mortgage-to-GDP ratio, new construction to-GDP ratio, and house price ratio in a given city. I did. the rest of the country.
Cities with scores above 1.0 are considered high risk, and cities with scores above 1.5 are considered high risk.
The six cities with scores above 1.0 are listed below in ascending order. Last year’s scores are also listed.
