In times of abundance of liquidity and a scarcity of profitability, the "brick" remains the last straw for many investors . So much so that there are already many cities with high risk of real estate bubble. According to the annual rate on the real estate sector published by the UBS Global Real Estate Bubble, which analyzes the prices of residential properties in 24 major cities around the world, cities such as Munich, Toronto, Hong Kong and Amsterdam are at the highest risk. The report also points to the eurozone as a region where more have triggered the imbalances.
Madrid is included for the first time in the study and concluded that housing prices in the capital have increased by 30% since 2012 , but still around 25% below the 2007 peak. Madrid "is benefiting from good financing conditions after a long period of debt reduction" and the construction activity has accelerated. "Although we expect prices to continue to rise, the extra supply and a moderate growth of the revenue limit the prospects of increase of prices and rents. The time it would take, on average, a qualified employee of the sector of services to buy an apartment of medium size near the center of the city has already increased to six years 175, have been indicated in this study.
So, in the last four quarters, the imbalances have soared especially in the euro area: Frankfurt and Paris are the two cities most prominent in addition to those who are at risk of a bubble over the last year. In contrast, the valuations of Vancouver, San Francisco, Stockholm and Sydney have recorded heavy falls. The London property market has cooled "considerably" since the financial centre "has ceased to be at risk of a bubble for the first time in four years."
on the other hand, the index scores for New York and Los Angeles are "somewhat lower" than a year ago, while Tokyo and Singapore remain "virtually unchanged". The chief investment officer of UBS Global Wealth Management, Mark Haefele, has pointed out that on a global scale, "the economic uncertainty is more than offsetting the effect of falling interest rates on the demand for urban housing". However, he believes that in some parts of the euro zone, "the low rates have continued to contribute to boost the property valuations to a risk of a bubble".
"On average, in the cities analyzed, the increases in prices adjusted for inflation have been virtually stagnant in the last four quarters," he argued. For his part, Claudio Saputelli, head of the real estate market UBS Global Wealth Management, has indicated that the "collapse" of interest rates around the world, "will not rescue the housing market".
"mortgage rates are not the main obstacle for those who want to buy a home in many cities. Many families simply do not have the necessary funds to meet the financing criteria of banks, which we believe presents one of the main risks to the property values in the urban centres," he added. In this line, Matthias Holzhey, lead author of the study and head of real Estate Investments Swiss UBS Global Wealth Management, has warned that investors should remain "prudent" with respect to housing markets that are "at-risk bubble".
Ibiza, the most expensive city
on the other hand, the data-Building on the appraised value of the free housing in the municipalities with over 25,000 inhabitants is extracted that Ibiza is the Spanish city is with the most expensive square metre to achieve the 3.708, € 8 . We continue to San Cugat del Vallès (3.438 € /m2); Barcelona (3.417,3 euros/m2); Palma de Mallorca (2.096,5 euros/m2); Castelldefels (3.087 € /m2); Madrid (3.223 € /m2); Majadahonda (of 3,030 euros/m2); Pozuelo de Alarcón (3.186,2 euros/m2); Getxo (2.962,1 euuros/m2); Three Songs (2.540, € 8/m2); Bilbao (2.433,2 euros/m2), among others.
Of the bulletins of the ministry also shows that the average price of free housing during the second quarter of the year slowed its growth to 3.1% in the interannual rate, up to 1.637,4 euros per square meter , the largest amount recorded since the first three months of 2012, when it surpassed the 1.649 euros.
Despite this increase, the average price of the home has softened its stands with respect to the first quarter of the year , when it is more expensive, a 4.4% compared to the same period of the previous year, according to the latest data of the Ministry of Development.
According to the historical series of this statistic, the average value per square meter during the second quarter of the year was 22% lower than the peak reached in the first quarter of 2008, in the boom of the real estate sector, with 2.101 euros. For its part, from the minimum value during the crisis, reached in the third quarter of 2014, the price has recovered to 12.4%.
Date Of Update: 02 October 2019, 17:00
