The research service of the UBS bank has recently published the latest edition of the Índice Global de Riesgo de Burbuja Inmobiliaria, an annual report in which the evolution of the offer is evaluated, demand and housing prices in 25 major capitals of various developed economies.

According to UBS experts, muchas de las ciudades estudiadas enfrentan un enorme riesgo de bubble. Munich, with a score of 2,35, top of the list y acumula tres años de crecimiento continuado. Conversely, Chicago stands out for obtaining a rating of -0,66, indicating that house prices are below normal, something that also happens in Dubai, whose rating is also in negative territory, with -0,4 points.

Madrid es una de las ciudades cubiertas por el índice de UBS. Of the twenty-five capitals analyzed, the Villa and Court figure in the position 21, lo que indica que el riesgo de bubble en su sector inmobiliario es marcadamente inferior al observado en la mayoría de las grandes ciudades estudiadas. The mark obtained by Madrid is 0,43 points.

Taking into account that the grade obtained in 2018 it was of 0,36 points and the grade obtained in 2019 came to 0,61 points, la relajación del riesgo de bubble parece una buena noticia, but it is still true that el impacto de la covid-19 puede haber contribuido a la evolución favorable que comunica UBS. In the next years, dejar de estrangular la oferta y favorecer nuevos desarrollos urbanísticos y de vivienda será una política clave para evitar que el riesgo de bubble vuelva a ir en aumento.

In any case, the experts of the UBS research service consider that the current price of houses in Madrid tends towards equilibrium, so that la Villa y Corte aparece entre las capitales con una “fair valuation” en su parque de vivienda. Apart from Chicago and Dubai, where prices are below normal, Milan and Warsaw are the only capitals that have a lower grade than Madrid, with 0,23 and 0,36 points each.

Among the cities with high prices, UBS considers the situation to be somewhat more manageable in San Francisco, Tel Aviv, Sydney, Moscow or New York, with notes ranging from 0,56 a 0,99 points, while Vancouver, London, Such, The Angels, Stockholm or Geneva present a more stressed housing market, with ratings ranging from 1,08 and 1,37 points.

However, UBS believes that the most delicate situation of all is that of Munich, Frankfurt, Toronto, Hong Kong, Paris, Amsterdam and Zurich. In all these cities, who receive grades ranging from 1,51 a 2,35 points, the index observes a very high level of real estate prices, coherente con un escenario de verdadero riesgo de bubble.

real estate-bubble-risk-1.png
If the result of the twenty-five capitals analyzed is compared, the average grade is 1,0012, while Madrid receives 0,43 points.
real estate-bubble-risk-2.png
real estate-bubble-risk-3.png

[Source: Free market]