Three US cities are overvalued but no bubble risk

AFP | Hong Kong's property market has been red hot in recent years

AFP | Hong Kong's property market has been red hot in recent years

Toronto and Vancouver real estate are two of the world's most bubbly markets, according to a Swiss mega bank.

The Global Real Estate Bubble index scores for the USA cities are below their pre-recession 2006 values.

The report was released on the same day as three of Hong Kong's biggest banks raised their lending rates for the first time in 12 years, ending an age of cheap cash that could hit the city's famously red-hot property market.

"Nevertheless, investors should remain selective within housing markets in bubble risk territories such as Hong Kong, Toronto, and London", he said. Major imbalances are also found in 10 other locations including Stockholm, Paris, San Francisco, Frankfurt and Sydney. However, it did note "major imbalances" in San Francisco, Los Angeles, and NY. The 2018 Index 2018 from UBS Global Wealth Management's Chief Investment Office indicates bubble risk or a significant overvaluation of housing markets in most major developed market financial centers.

There is no global evidence of simultaneous excesses in lending and construction and outstanding mortgage volumes are growing half as fast they were then, limiting any damage from another crisis. However, an "explosive uptrend" was evident in the largest euro zone economies, as well as Hong Kong and Vancouver. Amsterdam rose from 8th place last year to 5th this year, passing Sydney, London and Stockholm.

UBS also spoke of an affordability crisis, noting that "most households can no longer afford to buy property in the top financial centres without a substantial inheritance".

Passenger plane crash landed into the ocean
The airline did not immediately respond to requests for more details about the passenger, such as his age or nationality. He said an investigative team would be on the ground in Chuuk by Saturday to figure out what went wrong.

It warned this situation "jeopardises cities´ long-term growth potential". Boston is fairly valued while Chicago is the only undervalued city on the list.

Overall, prices in most of the 20 cities grew "considerably" less in the past four quarters than in previous years, the report said. Last year's price climb provoked an increase in stamp duties targeted at speculative investors.

"The prime segment has been hurt by higher stamp duties for luxury and buy-to-let". That means we've likely priced in a lot of future growth in today's market.

"In inflation-adjusted terms, they are 50% higher than five years ago".

"But a sharp correction seems unlikely, given the pent-up investment demand and ongoing low mortgage rates", UBS said in a report.

Recommended News

  • Erdogan expected to adopt friendlier tone in Germany visit

    Erdogan expected to adopt friendlier tone in Germany visit

    Erdogan said Turkey will continue to strengthen the investment environment without compromising the rules of the free market economy.
    India to Address the United Nations General Assembly Today

    India to Address the United Nations General Assembly Today

    Qureshi warned India against testing patience of Pakistan. "They preferred politics over peace", said Qureshi. FM Qureshi expressed Pakistan's desire to engage with India for lasting peace in the region.
    CBS subpoenaed for Moonves sexual misconduct probes

    CBS subpoenaed for Moonves sexual misconduct probes

    The New York State Attorney General has also requested information about the allegations, CBS said. The New Yorker was one of the publications that broke the story of allegations against Weinstein.
  • Declan Rice 'Leaning Towards' Making England Switch

    Declan Rice 'Leaning Towards' Making England Switch

    The 19-year-old has been in negotiations over a new deal for a while but the two parties are apart in their estimations. But the Daily Mail have weighed in with a report claiming that the offer was as low as £12k-per-week.
    OnePlus 6T to come with a 3700mAh battery!

    OnePlus 6T to come with a 3700mAh battery!

    The renders confirm the details leaked previously - the OnePlus 6T has a similar footprint to the OP6, albeit with slight changes. Besides this, the phone is also likely to feature a "waterdrop" style notch display, which has also been seen on Oppo R17 .
    Iranian President Hassan Rouhani rules out meeting with President Donald Trump

    Iranian President Hassan Rouhani rules out meeting with President Donald Trump

    Aside from Iran, the other participants are Britain, China, France, Germany, Russia and the European Union. The accord with OPEC member Iran was negotiated under Democratic US President Barack Obama .
  • Massive wave hits Palu in Indonesia

    Massive wave hits Palu in Indonesia

    A woman cries as people look at the damages after an quake and a tsunami hit Palu, on Sulawesi island on 29 September 2018. What is being done for the survivors? With Palu airport closed, relief workers have to make their way to Palu by road.
    Combined birth control may reduce ovarian cancer risk

    Combined birth control may reduce ovarian cancer risk

    Using combined hormonal contraception at any point, or in any form, was linked with a much lower risk of ovarian cancer. In 2014, for instance, over 21,000 new cases of ovarian cancer occurred, at least 14,000 of which resulted in death.
    Jürgen Klopp backs out-of-sorts Mohamed Salah to overcome tough spell

    Jürgen Klopp backs out-of-sorts Mohamed Salah to overcome tough spell

    Daniel Sturridge came back to haunt his former side with a stunning goal as Liverpool claimed a 1-1 draw at Chelsea on Saturday evening.
  • Nintendo’s Dragalia Lost is Now Available for Download

    If you've played Fire Emblem Heroes (another Nintendo mobile title), this system should be familiar to you. Players can pre-register for the game now and it'll download automatically when it's available.

    New Report Casts Doubt Over Rian Johnson’s Star Wars Trilogy

    The only announced movie is Star Wars 9, which is now shooting and has been in production since August. Abrams, and Michelle Rejwan, and executive produced by Callum Greene and Jason McGatlin.
    Geron's Drug Alliance with Janssen Terminated, Shares Plummet 68%

    Geron's Drug Alliance with Janssen Terminated, Shares Plummet 68%

    Geron's stock was down 68% in premarket trading, a reversal of its 40% spike when the companies inked the deal four years ago. The Company has revised its financial projections and now anticipates 2018 operating expenses to be ~$37M (previously $30M).

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.