ab
UBS Global
Real Estate
Bubble Index
For housing markets of select cities
2016
Chief Investment Offce WM
2UBS Global Real Estate Bubble Index
3 Editorial
4 UBS Global Real Estate
Bubble Index
4 Bubble risk on the rise
5 Diferent regional cycles
7 Global cities’ benchmarks
8 Single city description
8 London
9 Hong Kong
10 Zurich
11 Singapore
12 New York
13 Select cities
17 Methodology & data
This report has been prepared by
UBS Switzerland AG. Please see the
important disclaimer at the end of the
document. Past performance is not an
indication of future returns. The market
prices provided are closing prices on
the respective principal stock exchange.
Editor in Chief
Matthias Holzhey
Authors
Matthias Holzhey
Maciej Skoczek
Editorial deadline
19 September 2016
Desktop
CIO Digital & Print Publishing
Cover photo
Dreamstime
Printer
Neidhart + Schn, Zürich
Language
English
Contact
ubs-cio-wm@ubs
Content
3UBS Global Real Estate Bubble Index
Editorial
Dear reader,
In a world in which more than a third of all government bonds ofer negative
yields, investing in tangible assets remains popular. So it is hardly any wonder
that housing markets are again overheating, just a few years afer the last major
wave of global correction. We see a signifcant overvaluation of housing mar-
kets in some key fnancial centers.
What these cities have in common are excessively low interest rates, which are
not consistent with the robust performance of the real economy. This is illu-
strated by the Eurozone, where monetary policy cannot accommodate the
macro economic diferences between the countries. Yet other countries such
as Australia, Canada and the UK are also keeping their interest rates artifcially
low. When combined with rigid supply as well as sustained demand from
China, this has produced an ideal setting for excesses in house prices.
Even in the cities with the clearest signs of a real estate bubble, it is not possible
to predict exactly the timing and duration of a correction. The situation is never-
theless fragile for housing markets. A sharp increase in supply, higher interest
rates or shifs in the international fow of capital could trigger a major price
correction at any time.
The publication
UBS Global Real Estate Bubble Index
reveals the fnancial centers
where the imbalances are most apparent, and the cities where house prices still
have fair valuations overall. In this issue, we have added Milan, Munich and
Stockholm to our selection of cities.
We hope you fnd it an engaging read.
Matthias Holzhey
Head Swiss Real Estate Investments
Chief Investment Offce WM
Claudio Saputelli
Head Global Real Estate
Chief Investment Offce WM
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