These Global Cities Show the Highest Real Estate Bubble Risk
Housing bubbles are a tricky phenomenon. As a market gathers steam and prices increase, it remains a matter of debate whether that market is overvalued and flooded with speculation, or it’s simply experiencing robust demand.
Of course, once a bubble bursts, it’s all obvious in hindsight.
One common red flag is when prices decouple from local incomes and rents. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.
The map above, based on data from the Real Estate Bubble Index by UBS, examines 25 global cities, scoring them based on their bubble risk.
Overinflated Markets
In the 2022 edition of the Real Estate Bubble Index, nine of the cities covered were classified as having extreme bubble risk (1.5 or higher score).
| Rank | Risk Category | City | Bubble Index Score |
|---|---|---|---|
| #1 |  |  Toronto | 2.24 |
| #2 | |  Frankfurt | 2.21 |
| #3 | |  Zurich | 1.81 |
| #4 | | Munich | 1.80 |
| #5 | |  Hong Kong | 1.71 |
| #6 | | Vancouver | 1.70 |
| #7 | |  Amsterdam | 1.62 |
| #8 | |  Tel Aviv | 1.59 |
| #9 | |  Tokyo | 1.56 |
| #10 |  |  Miami | 1.39 |
| #11 | | Los Angeles | 1.31 |
| #12 | |  Stockholm | 1.22 |
| #13 | |  Paris | 1.21 |
| #14 | |  Sydney | 1.19 |
| #15 | | Geneva | 1.14 |
| #16 | |  London | 1.08 |
| #17 | | San Francisco | 0.78 |
| #18 | | Boston | 0.75 |
| #19 | |  Madrid | 0.59 |
| #20 | | New York | 0.57 |
| #21 | |  Singapore | 0.50 |
| #22 |  |  Milan | 0.34 |
| #23 | |  Sao Paulo | 0.20 |
| #24 | |  Dubai | 1.16 |
| #25 | |  Warsaw | 0.15 |
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