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UBS Ranks Global Cities for Bubble Risk

UBS Global Wealth Management’s UBS Global Real Estate Bubble Index 2018 indicates bubble risk or a significant overvaluation of housing markets in most major developed market financial centers. Bubble risk appears greatest in Hong Kong, followed by Munich, Toronto, Vancouver, London and Amsterdam.

Overall, the index scores for the U.S. cities fell below their 2006 peak values. New York remains marginally overvalued, but its score dropped slightly given the lack of price growth over the last four quarters. In Boston and Chicago, valuations remained mostly low. Chicago, in particular, remains the only undervalued city in the study globally, with inflation-adjusted prices still nearly 30% below their 2006 peak.

On the other hand, scores rose in the West Coast cities of Los Angeles and San Francisco. Notably, real prices in San Francisco climbed 9% since last summer and now exceed their 2006 peak by more than 20%. The city is approaching high valuation risk.

UBS Global Wealth Management’s Mark Haefele says, “Although many financial centers remain at risk of a housing bubble, we should not compare today’s situation with pre-crisis conditions.”

In contrast to the boom of the mid-2000s, no global evidence of simultaneous excesses in lending and construction exists. Outstanding mortgage volumes are growing half as fast as in the run-up to the financial crisis, limiting economic damage from any price correction.

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Read more at UBS Global Wealth ManagementConnect With UBS Global Wealth Management’s Haefele

About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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