The excesses on the global real estate market have begun to correct, there is a risk that a bubble will fall for the third consecutive year in big cities, UBS Global Real Estate Bubble Index 2025 shows. However, as the data of the Swiss investment bank, the purchase of a 60 square meter apartment remains for the majority of the world.
The Hong Kong real estate market is the least accessible, with an estimated average income of about 14 years needed to buy a 60 sqm apartment near the city center.
How old is a worker to buy a 60 MP apartment?
Housing prices were also decoupled by the revenues of workers in Paris, London and Tokyo, where an average worker takes over 10 years to buy a small apartment, according to Money Review.
How old is a worker to buy a 60 MP apartment?
Salaries are also insufficient in Zurich, Sydney, Geneva, Munich and Sao Paulo, notes UBS.
Particularly striking is the finding of analysts that the amount of housing that an average qualified worker can purchase according to his income is currently about 30% lower than in 2021, before the beginning of interest rates worldwide.
When the property on a home becomes too expensive for citizens, governments often intervene, regulating the market. Maciej Skoczek, the author of the study director of the UBS Global Wealth Management, stresses: “The stricter rules, from new taxes for purchase prohibitions and rents control, have reduced the attractive markets, such as Vancouver, Sydney, Amsterdam, Paris, New York and London.”
UBS believes that, given the current interest rates, the current apartments prices seem difficult to maintain, especially in New York, Sydney and London.
The highest increase in bubble risk in Dubai and Madrid
According to this year's edition of the UBS Global Real Estate Bubble, Miami has the highest risk of real estate bubble between the studied cities, followed by Tokyo and Zurich. For this study, the UBS analyzed the prices of housing in 21 important cities around the world.
The increased risk is obvious in Los Angeles, Geneva, Amsterdam, as well as Dubai, who, together with Madrid, has registered the highest risk increase in the previous edition of the study.
The risk of a bubble is moderate in Sydney, Vancouver and Toronto. Madrid, Frankfurt and Munich also belong to the moderate risk group. According to the index, London, Paris and Milan are facing a low risk of a bubble. Outside Europe, Hong Kong, San Francisco, New York and São Paulo are in the same category, São Paulo presenting the lowest risk of all the analyzed cities.
Global real estate markets continued to slow down. Matthias Holzhey, co-author of the study, explains: “The generalized boom has diminished, the average real estate risk in the big cities decreasing for the third consecutive year.” Cities that were reported as having a high risk of real estate bubble in 2021, such as Frankfurt, Paris, Torong, Hong Kong or Vancouver, registered an average decrease in real prices of almost 20% compared to their peaks, due to the increase of interest rates from the coming years. By comparison, real prices in cities with lower imbalances decreased by approximately 5%.
However, some cities oppose this trend. In the last five years, Dubai and Miami have been leaders, with average increases in real prices of about 50%. Tokyo and Zurich followed, with 35%increases, respectively almost 25%. However, compared to last year, Madrid registered the highest real increase in all the analyzed cities, with an increase of 14%.
