Housing markets, cities most at risk of bubble: UBS

Housing costs are rising in almost every major city in the world.

At least six people risk being in a bubble, defined as a persistent rise in prices to the point where properties are well above their fundamental value.

"Most households can no longer afford to buy property in the best financial centers without substantial legacy," UBS said in its global real estate bubble index in 2018.

"Rents continue to be an important part of income."

Policymakers will have to intervene in financial affordability crises, for example by granting subsidies to new homebuyers.

But other policies could be more damaging, UBS said. If governments impose heavy property taxes in expensive cities, they could drive out foreign investors. They could also drive prices down too quickly, hurting existing owners who want to sell.

Bubbles are often hard to identify until they burst, but UBS has selected six cities that are at risk of bubble. Only two of the major cities surveyed – Boston and Singapore – were considered "quite valued".

Here is the list of cities on the bubble watch in the ascending order: