Zurich poses the highest risk of a property bubble
Keystone-SDA
Among the world’s cities, Zurich poses the highest risk of a property bubble, ahead of Tokyo, says a new analysis by Swiss bank UBS. In Geneva, the risk has increased compared with last year.
With an index reading of 1.69 points, up from 1.55 points last year, Zurich tops the list of cities with the highest risk of a property market bubble, according to the Global Real Estate Bubble Index published on Tuesday by Switzerland’s leading bank.
Over the past 20 years, Switzerland’s biggest city has seen the sharpest rise in property prices of all the cities surveyed. Its appeal as a business hub and the influx of international professionals, particularly in the technology and artificial intelligence (AI) sectors, are driving demand for housing.
+ Zero interest rates drive up Swiss property prices
At the same time, low interest rates and a marked shortage of supply are putting further pressure on prices: the vacancy rate is close to zero. The supply of owner-occupied housing remains well below its historical level. Furthermore, affordability issues are widening the gap between the most sought-after neighbourhoods and the rest of the property market.
Tokyo and Miami are just behind Zurich in the rankings, with indices of 1.54 and 1.41 points respectively. Geneva, with an index of 1.12 points, also presents a high risk of a property bubble. In Geneva, the risks have increased compared with last year, when the index stood at 1.05 points.
+ Switzerland faces worst housing shortage since 2014
In contrast, Paris (0.33 points), London (0.30 points), New York (0.28 points), San Francisco (-0.02 points) and São Paulo (-0.24 points) show the lowest risks.
UBS analysed residential property prices in 23 international cities. Lisbon and Seoul were included in the study for the first time this year.
+ How we produce news in English
Translated from French, reviewed by an English Department journalist.
