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The UBS Global Real Estate Bubble Index analyzes the real estate market of 25 major cities across the globe and assigns them a score between -0.5 to 2.0 to convey bubble risk. The higher the score, the more imbalanced the market is, with those above 1.5 in “bubble-risk” territory. Source
- At the top of UBS’ findings is Switzerland’s financial capital Zurich, with a 1.71 score, putting the city firmly in the bubble-risk zone. With its high-income earners and the country’s low interest rates, the city has been steadily climbing the real estate bubble-risk rankings, 5th in 2021, to 3rd in 2022, to the top spot this year.
- Tokyo (1.65) is the second and final entry in the real estate markets with immediate bubble risk. This is a decrease from nine total cities in that category last year.
- The other seven real estate markets which scored above 1.5 in 2022 have all seen significant real property price drops, many of them in the double-digits, which has moved them into “overvalued territory.” The key driver of these price drops across the board are the aggressive interest rate hikes to counter rising inflation, which pushed many housing markets into unaffordability, forcing sellers to lower their prices.
Here’s the full rankings for bubble risk in all 25 property markets:
| Rank | City | Index Score | Rating |
|---|---|---|---|
| 1 |  Zurich |
1.71 | Bubble-Risk |
| 2 |  Tokyo |
1.65 | Bubble-Risk |
| 3 |  Miami |
1.38 | Overvalued |
| 4 |  Munich |
1.35 | Overvalued |
| 5 | Frankfurt |
1.27 | Overvalued |
| 6 |  Hong Kong |
1.24 | Overvalued |
| 7 |  Toronto |
1.21 | Overvalued |
| 8 | Geneva |
1.13 | Overvalued |
| 9 | Los Angeles |
1.03 | Overvalued |
| 10 |  London |
0.98 | Overvalued |
| Rank | City | Index Score | Rating |
|---|---|---|---|
| 11 |  Tel Aviv |
0.93 | Overvalued |
| 12 | Vancouver |
0.81 | Overvalued |
| 13 |  Amsterdam |
0.80 | Overvalued |
| 14 |  Stockholm |
0.74 | Overvalued |
| 15 |  Paris |
0.73 | Overvalued |
| 16 |  Sydney |
0.67 | Overvalued |
| 17 |  Milan |
0.49 | Fair-Valued |
| 18 | New York |
0.47 | Fair-Valued |
| 19 |  Singapore |
0.47 | Fair-Valued |
| 20 |  Madrid |
0.46 | Fair-Valued |
Here’s UBS’ full ranking of real property price changes between 2022–2023.
| Rank | City | Real Property Price Growth (YoY) |
|---|---|---|
| 1 |  Dubai |
+14.6% |
| 2 | Miami |
+6.0% |
| 3 | Tokyo |
+3.6% |
| 4 | New York |
+3.2% |
| 5 | Madrid |
+2.9% |
| 6 | Singapore |
+2.8% |
| 7 | Zurich |
+1.5% |
| 8 |  São Paulo |
+1.4% |
| 9 | Geneva |
-0.1% |
| 10 | Tel Aviv |
-0.7% |
Dubai, has registered double-digit growth property price growth fueled by expanding household incomes thanks to an economic boom from oil prices as well as increased immigration by wealthy individuals.
| Rank | City | Real Property Price Growth (YoY) |
|---|---|---|
| 11 | Milan |
-1.9% |
| 12 | Boston |
-3.4% |
| 13 | Los Angeles |
-3.7% |
| 14 | Hong Kong |
-7.1% |
| 15 | Paris |
-7.9% |
| 16 |  Warsaw |
-9.3% |
| 17 | Sydney |
-10.5% |
| 18 | Vancouver |
-10.6% |
| 19 | San Francisco |
-10.6% |
| 20 | Munich |
-13.8% |
Ranked: Cities With Rising Rental Prices
Even as property prices have cooled in the majority of the analyzed real estate market, the rental market for many cities, like Vancouver (+10.7%) and Toronto (+6.0%) has moved swiftly in the opposite direction.
Inflation is pushing up incomes, in turn leading to rising rents and, furthermore, owners-occupants with tenants seek to pass on higher mortgage costs in an effort to reduce their financial burden.