UBS Global Real Estate Bubble Index 2021

Find out which cities have the greatest housing bubble risk and discover the latest housing market trends.

05 Oct 2021

The UBS Global Real Estate Bubble Index(PDF, 5 MB) analyses residential property prices in 25 major cities around the world. In this year’s edition, we discuss how housing prices in urban centers have continued to climb, which is noteworthy for two reasons. First, because city life has suffered a considerable blow from the pandemic and the rise of remote working. Second, because housing affordability in cities was already heavily strained even before the pandemic.

And yet the lack of affordability of homeownership has evidently not been an obstacle to price increases. Record low financing costs and the entrenched expectation of long-term value gains have made owning a home so appealing that the price and debt level don’t seem to matter—however, this may prove to be a fallacy.

Where are the greatest bubble risks in 2021?

Use our interactive Global Real Estate Bubble Index to track and compare the risk of bubbles in 25 cities around the world over the last three years. Moscow, Stockholm, and the cities around the Pacific—Sydney, Tokyo, and Vancouver—recorded double- digit price growth. European housing markets are still hot, and imbalances are sky-high.

Cities in focus from this year’s bubble index

Index scores have increased in all analyzed APAC cities over the last four quarters. Singapore was able to keep house price and income growth aligned. But in 2018, stronger price growth kicked in as Singapore benefited from higher foreign demand. This year, valuations have increased slightly, and the market is slightly overvalued.

Over the last five years, London has recorded the second weakest price growth of all the cities included in the study. But the beginning of the pandemic in 2020 marked the bottoming out of the local housing market. Between mid-2020 and mid- 2021, real house prices in England’s capital increased by almost 4%. Overall, London’s housing market remains in overvalued territory., 

Over the last ten years, in Toronto the real price level has almost doubled amid strong population growth and falling mortgage rates. After the introduction of restrictive regulations (e.g., a foreign-buyers’ tax and rent controls), the market took a breather in 2017 and 2018, only to reaccelerate in 2020. Real prices increased by almost 8% over the last four quarters.

Recommended reading