The bubble index for these cities ranged between 2.21 for Frankfurt and 1.61 for Amsterdam.īubbles are a recurring phenomenon in property markets, UBS explained. Looking at Europe, UBS’s report pointed to bubble-like conditions in five major cities, including Frankfurt, Zurich, Munich and Amsterdam. Indeed, we are witnessing the global owner-occupied housing boom finally under pressure, and in a majority of the highly-valued cities, significant price corrections are to be expected in the coming quarters.” “With a deterioration of economic conditions, this too is at risk of faltering. In a paragraph headlined “Game over”, the UBS report noted that a “robust labour market” remains the last pillar of support for the owner-occupied housing market in most cities. But as real estate markets rarely trend sideways, this is not the most likely outcome.” Labour market as last pillar “In cities with strong population growth, such an adjustment could manifest in the form of a prolonged stagnation in nominal purchase prices and a price correction in real terms-i.e., adjusted for inflation. ![]() “Consequently, the willingness to pay for owner-occupied homes is likely to take a hit,” the UBS report said. With a rise in interest rates, finance costs have increased while financial markets across the world have been rocked by geopolitical developments and severe declines in asset prices. It's “game over” for housing markets, Swiss bank UBS writes in its latest Real Estate Bubble Report. ![]() House owners and real estate investors should not expect the market to trend sideways. Housing markets in major cities across the world face a “prolonged stagnation” in purchase prices and a price correction.
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