Urban skylines may still gleam, but the 2025 UBS Global Real Estate Bubble Index warns that cracks are showing beneath the surface.
The latest report finds that while overall exuberance in housing has cooled for a third straight year, several cities remain deeply exposed to bubble risks.
Miami tops the global list, scoring 1.73, with prices now diverging further from rents than even during the 2006 housing boom. Tokyo (1.59) and Zurich (1.55) also sit firmly in the “high risk” category, buoyed by years of outsized gains compared to local incomes and rents.
Elevated risks extend to Los Angeles, Dubai, Amsterdam, and Geneva.
London low risk
By contrast, London, Paris, New York, and Hong Kong now rank as “low risk”, following years of price stagnation or outright declines.
São Paulo shows the lowest risk in the survey. Cities such as Toronto, Vancouver, Frankfurt, and Sydney sit in the “moderate risk” band, reflecting poor affordability and lingering financing pressures despite recent rate cuts.
The study highlights a sharp divergence: over the past five years, home prices in high-risk markets surged nearly 25% after inflation, while those in moderate or low-risk cities fell about 5%.
UBS argues that structural forces, ageing populations, financial repression, and capital inflows into fiscally stronger economies, could keep real estate attractive as a store of value.
Affordability stretched
Yet affordability remains severely stretched: in Hong Kong, it takes 14 years of income for a skilled worker to afford a modest flat, versus just five years in Miami.
The broader message is clear: global housing no longer looks uniformly overheated, but localised risks remain acute.
Investors, homeowners, and policymakers alike will need to watch for turning points in affordability, interest rates, and foreign capital flows that could decide whether these frothy markets deflate gently... or burst.