国际投行报告：2023全球房地产泡沫指数（英文）

September2023

ChiefInvestmentOfficeGWM

InvestmentResearch

UBSGlobal

RealEstate

BubbleIndex

Content

3Editorial

4Keyresults

5Deflatingbubbles

7Regionalfocus

13Citybenchmarks

15Cityspotlights

22Cityoverview

23Methodology&Data

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global-real-estate

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bubble-index

UBSGlobalRealEstate

EditorinChief

Editorialdeadline

BubbleIndex

MatthiasHolzhey

19September2023

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UBSSwitzerlandAG,UBSAGSingapore

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Branch,UBSAGHongKongBranch,UBSAG

MatthiasHolzhey

CIOContentDesign

LondonBranchandUBSFinancialServices

MaciejSkoczek

Inc.(UBSFS).

ClaudioSaputelli

KatharinaHofer

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GettyImages

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attheendofthedocument.Past

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Language

performanceisnotanindication

JonathanWoloshin(US)

English

offuturereturns.

DeanTurner(London)

WenChingLee(Singapore)

MatteoRamenghi(Milan)

RonaldoPatah(SãoPaulo)

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2UBSGlobalRealEstateBubbleIndex2023

Editorial

Dearreader,

Lowfinancingcostshavebeenthelifebloodofglobalhousingmarketsoverthepastdecade,drivinghomepricestodizzyingheights.However,theabruptendofthelowinterestrateenvironmenthasshakenthehouseofcards.Onaverageofallcities,

withinthepastyear,inflation-adjustedhomepriceshaveseenthesharpestdrop

sincetheglobalfinancialcrisisin2008.Citiesthathavebeenclassifiedinthebubbleriskzoneatleastonceinthepastthreeyearsrecordedanevenstrongeraverage

pricedecline.Buttheimpactofhigherinterestrateshasvariedmarkedlyacrosscities,withthepricecorrectiondependingonseveralotherfactorsaswell.

Wherehomefinancingwasalreadyatthelimitofaffordabilitywithlowinterestrates,higherinterestratesalmostinevitablyledtoaslumpinlocaldemand.

Ifamarketwascharacterizedbyasignificantdecouplingofpurchasepricesfrom

rents,theriseinmortgageratesshifteddemandbacktotherentalmarket.Inhousingmarketsthatwerepredominantlyshort-termfinanced,ownerhouseholdsimmedi-atelyfeltthehigherfinancingcostsandwereforcedtoacceptlowerpriceswhen

selling.Wherebuy-to-letbecamepopularduringthelowinterestrateperiod,firesalesduetohigherinterestratesandslumpingprofitabilityintensifiedacorrection.Incitieswhereseveralofthesefactorscametogetheratthesametime—asin

Toronto,Frankfurt,andStockholm,forexample—re-pricingtookplaceallthefasterandmoreseverely.

Inthisissue,findoutinwhichcitiespropertypricesandvaluationshavefallenthemost,where(further)correctionsareimminent,andwherepriceincreasesarecontinuingorcouldhappeninthefuture.

Wehopeyouenjoyreadingit.

ClaudioSaputelli

HeadSwiss&GlobalRealEstateChiefInvestmentOfficeGWM

MatthiasHolzhey

SeniorRealEstateEconomist

ChiefInvestmentOfficeGWM

3UBSGlobalRealEstateBubbleIndex2023

0.47

Keyresults

0.74Stockholm

Amsterdam0.80

Toronto1.21

London0.98

Paris0.73

Geneva1.130.34Boston

0.46

Frankfurt

Vancouver0.81

1.27

–0.28Warsaw

NewYork

SanFrancisco0.27

LosAngeles1.03

1.71Zurich

1.35Munich

0.14Dubai

1.65Tokyo

0.49Milan

1.38MiamiMadrid

1.24HongKong

0.93TelAviv

0.47Singapore

0.09SãoPaulo

Bubblerisk(>1.5)

Overvalued(0.5to1.5)Fair-valued(–0.5to0.5)

0.67Sydney

Pricesin

Fewercities

Tightfinancing

reversegear

atbubblerisk

conditions

Mostanalyzedurbancentershave

Riskscoreshavedroppedsharply

Financialaffordabilityofhousing

seenarealhousepricedropduring

inmostcitiesinrecentquarters.

hascollapsedasmortgagerates

thelastfourquarters.Incitiesat

HighimbalancespersistinZurichand

haveroughlytripledsince2021in

bubbleriskduringthelastthreeyears,

Tokyo—relativelylowmortgageand

mostmarkets.Therefore,household

propertypriceshavedeclinedby10%

inflationrateshavenotcausedany

leveragehasbeendeclininginmost

onaverage.

marketdisturbancethere.

countriesinrecentquarters.

Inflationas

Tooearly

Defying

game-changer

forturnaround

gravity

Inflationmadeadecisivecontribution

Thereismoredownsideinrealhouse

Themostsought-afterdestinations

tothereductioninimbalances.While

prices.However,ahousingshortage

inrecentyearsareSingapore,Dubai,

risinginterestratesputpressureon

hassetthestageforarenewedboom

andMiami.Inthosehotspotsofinterna-

houseprices,inflationsupportsincomeandrentalgrowth.Thelatterhasaccel-

inmanycities—ifinterestratesfall.

tionaldemand,rentalandfor-salepricegrowthclearlystandout.Pricesareup

eratedinmostcitiesoutsidetheUSand

asmuchas40%andrents50%higher

reachedthehighestvalueinalmost

thantwoyearsago.

adecade.

4UBSGlobalRealEstateBubbleIndex2023

Deflatingbubbles

Theglobalsurgeininflationandinterestratesoverthepast

twoyearshasledtoasharpdeclineinimbalancesinthehous-ingmarketsofglobalfinancialcentersonaverage,asmeasuredbytheUBSGlobalRealEstateBubbleIndex.Inthisyear’s

edition,onlythetwocitiesZurichandTokyohaveremainedinthebubbleriskcategory,downfromninecitiesayearago.Formerlyinthebubbleriskzone,Toronto,Frankfurt,Munich,HongKong,Vancouver,Amsterdam,andTelAvivsawtheirimbalancesdeclineandarenowintheovervaluedterritory.HousingmarketsinMiami,Geneva,LosAngeles,London,

Stockholm,Paris,andSydneyareovervaluedaswell.

Also,NewYork,Boston,SanFrancisco,andMadridhaveexpe-riencedadropinimbalances.Thesemarketsarenowfairly

valued,accordingtotheindex,asareMilan,SãoPaulo,and

Warsaw.SingaporeandDubaiarefairlyvaluedaswell,even

thoughtheirreputationasgeopoliticalsafe-havenshasrecentlytriggeredasurgeindemandforbothrentingandbuyingthere.

Pricecorrectionsacrosstheboard

Housepricegrowthhassufferedduetorisingfinancingcostsasaveragemortgagerateshaveroughlytripledsince2021inmostmarkets.Annualnominalpricegrowthinthe25citiesanalyzedhascometoastandstillafterabuoyant10%rise

ayearago.Ininflation-adjustedterms,pricesareeven5%lowernowthaninmid-2022.Onaveragethecitieslost

mostoftherealpricegainsmadeduringthepandemicandarenowclosetomid-2020levelsagain.

However,higherinterestrateshaveimpactedhouseprices

differentlydependingonexistingmarketimbalances

andprevailingmortgageterms.InFrankfurtandToronto

—thetwocitieswiththehighestriskscoresinlastyear’s

edition—realpricetumbledby15%inthelastfourquarters.

Acombinationofhighmarketvaluationsandrelativelyshortmortgagetermsputpricesalsounderstrongpressurein

StockholmandtoalesserdegreeinSydney,London,and

Vancouver.Incontrast,inMadrid,NewYork,andSãoPaulo

—citieswithmoderateriskvaluationssofar—realhomepriceshavecontinuedtoriseatasubduedpace.

UBSGlobalRealEstateBubbleIndex

Indexscoresforthehousingmarketsofselectcities,2023

–0.50.00.51.01.5

1Zurich1.71

2Tokyo1.65

3Miami1.38

4Munich1.35

5Frankfurt1.27

6HongKong1.24

7Toronto1.21

8Geneva1.13

9LosAngeles1.03

10London0.98

11TelAviv0.93

12Vancouver0.81

13Amsterdam0.80

14Stockholm0.74

15Paris0.73

16Sydney0.67

17Milan0.49

18NewYork0.47

19Singapore0.47

20Madrid0.46

21Boston0.34

22SanFrancisco0.27

23Dubai0.14

24SãoPaulo0.09

25Warsaw–0.28

BubbleriskOvervaluedFair-valuedRankchange

(>1.5)(0.5to1.5)(–0.5to0.5)vs.2022

Source:UBS

Foranexplanation,seethesectiononMethodology&dataonpage23.

Identifyingabubble

Pricebubblesarearecurringphenomenoninpropertymarkets.Theterm“bubble”referstoasubstantialandsustainedmispric-ingofanasset,theexistenceofwhichcannotbeprovedunlessitbursts.Buthistoricaldatarevealspatternsofpropertymarketexcesses.Typicalsignsincludeadecouplingofpricesfromlocalincomesandrents,andimbalancesintherealeconomy,such

asexcessivelendingandconstructionactivity.TheUBSGlobal

RealEstateBubbleIndexgaugestheriskofapropertybubbleonthebasisofsuchpatterns.Theindexdoesnotpredictwhetherandwhenacorrectionwillsetin.Achangeinmacroeconomicmomentum,ashiftininvestorsentimentoramajorsupply

increasecouldtriggeradeclineinhouseprices.

5UBSGlobalRealEstateBubbleIndex2023

Deflatingbubbles

Fundamentalssupportedbyinflation

Thewidespreaddecreaseinimbalanceswasnotonlya

consequenceoffallinghousepricesbutwassupportedbyrobustmarketfundamentalsanddeclininghouseholdleverage.Asbuyingaffordabilityhasdeterioratedsignifi-cantly,rentinghasboomed.ApartfromcitiesintheUS,nominalrentalgrowthhasacceleratedmarkedlysince

mid-2022andhasbeenpositiveinalllocationsanalyzed.ThesharpestrisesinrentswererecordedinSingapore

andDubai.

Inthewakeofgeneralinflation,nominalhousehold

incomeshavecontinuedtogrowatasolidpacecom-

paredtothepreviousdecade.Andasmortgagelendinggrowthhalvedinthelastfourquarters,aggregatehouse-holddebttoeconomicoutputhasbeendeclining,espe-ciallyinEurope.

Demandshowsgreenshoots

Asunemploymentratesinallthecountriescoveredhaveremainedwellbelowtheirten-yearaverages,theensu-inghighlevelofjobsecurityhaspartlycushionedthe

impactofrisingfinancingcostsonhousingdemand.

Butinflation-drivenincomegrowthandpricecorrectionshavenotbeenenoughtomeaningfullyimproveafford-ability.Onaverage,theamountoflivingspacethatis

financiallyaffordableforaskilledserviceworkerisstill40%lowerthanbeforethepandemicbegan.More

downsideinprices—atleastinrealterms—islikelyifinterestratesremainattheircurrentelevatedlevels.

Insomecities,however,theseedsforthenextpropertypriceboomhavealreadybeenplanted.Housingremainsundersuppliedinmostcitiesashybridworkinghasnotweakeneddemandforcity-livinginasustainedmanner.Inplaceswherethenumberofbuildingpermitshas

beendecliningsignificantlyinrecentquarters—most

notablyinEuropeanurbancenters—thehousingshort-agewilllikelyintensifyevenmore.Hence,housing

demandispilingupandpricesmaysoaragainas

soonasfinancialconditionsforhouseholdsimprove.

Fallingprices

Residentialrealpricegrowthrates,asof2ndquarter2023,annualizedin%

20222023

Dubai

Miami

Tokyo

NewYork

Madrid

Singapore

Zurich

SãoPaulo

Geneva

TelAviv

Milan

Boston

LosAngeles

HongKong

Paris

Warsaw

Sydney

Vancouver

SanFrancisco

Munich

London

AmsterdamToronto

Frankfurt

Stockholm

–20–10010

20

Housingmarketriskassessment

Last5years

Last4quarters

Sources:Seepage24.

6UBSGlobalRealEstateBubbleIndex2023

Regionalfocus

Eurozone

ThehousepricelevelinbothGermancitiesanalyzed,FrankfurtandMunich,doubledbetween2012and2022,whichwas

thestrongestgrowthofallcitiesincludedinthestudy.Solid

economicandemploymentgrowth,fallingmortgagerates,

stronginvestmentdemand,andsupplyshortagessupportedhigherprices.Butpriceshavebeenovershooting,inourview.Ratehikesandhighinflationtriggeredarevaluation.Peakinginearly2022,realpricesinFrankfurthavecorrectedbyalmost20%sincethen(seespotlightFrankfurtp.17),andby15%inMunich.Bothcitieshaveleftthebubbleriskzone,butremainhighlyovervalued.Thecorrectionisstillongoing.

PricesinAmsterdamralliedbyalmost20%ininflation-

adjustedtermsbetween2020andmid-2022alone,decou-

plingfromlocalrentsandincomes.TheUBSGlobalRealEstateBubbleIndexwasflashingwarninglights.Overthelastfour

quarters,priceshavefallenby14%—thestrongestannual

correctionsincethe1980s.Severalfactorshavesimultaneouslyweighedonowner-occupieddemand:worseningfinancing

conditions,inflationdiminishinghouseholds’purchasing

power,andtheirwillingnesstobuyahome,aswellasthe

reductionofthegiftallowanceforhomeownership.More-

over,ahighertransfertaxandprohibitionofrentingoutafterthepurchasehavedecreasedinvestmentdemand.Themarketisnowinovervaluedterritory,accrodingtotheindex.

Fallingmortgageratesandstronginternationaldemandwerethemaindriversofa30%realhousepriceincreaseinParisbetween2015and2020.Thecitybecamelessaffordable

andbiggerflatsforfamilieswereinshortsupply.Peopleleft

France’scapitalcity,renderingitspopulation5%lowerthan

adecadeago.Pricesstartedfallingin2021.Thedeclinehas

acceleratedinrecentquartersashighermortgagerates,lendingrestrictions,andapropertytaxhikedampenedbuyeractivity.

Overall,realpricescorrectedby8%overthelastfourquarters,thestrongestdeclineinalmostthreedecades,pushingthecityintoovervaluedterritory.

Madrid’shousingmarketisinfairvalueterritory.ComparedtootherEurozonecities,theSpanishcapitalhasremained

affordableasmeasuredbytheprice-to-incomeratio.After

athree-yearperiodofstagnation,pricesincreasedby3%ininflation-adjustedtermsoverthelastfourquarters.Overall,theyremain25%belowtheall-timehighin2007.Demandisshiftingtotherentalmarketashigherinterestratesreducetheattractivenessofpurchasingproperty.Morebuild-to-rentdevelopmentsareexpected,keepingthemarketinbalance.

Milan’shousingmarkethasrecordedrisingpricessince2018.Fallingmortgagerates,arobusteconomy,newdevelopments,andafavorabletaxregimesupportedhousingdemand.

Thoughnominalpricescontinuedtorisebetweenmid-2022

andmid-2023,theycouldnotkeepupwithinflation.Real

pricesdroppedby2%,inlinewithlocalrealrentalandincomegrowth.Wethinkthemarketremainsfairlyvalued,virtually

unchangedfromlastyear.Solidprospectsforthelocal

economy,anextensionoftheundergroundrailway,andtheupcoming2026OlympicWinterGamesallcontributetosustainingvaluationsinnominalterms.

Historicaldevelopmentofindexscores

2.5

1.5

0.5

–0.5

–1.5

–2.5

8387919599030711151923

FrankfurtMunichAmsterdam

Source:UBS

8387919599030711151923

MadridMilanParis

Source:UBS

bubblerisk

overvalued

fair-valued

undervalued

depressed

7UBSGlobalRealEstateBubbleIndex2023

Regionalfocus

RestofEurope

Buyingowner-occupiedrealestateinZurichnowcostsover

50%morethanadecadeagoinnominalterms.Anincreasingnumberofhigh-incomeearnersandultra-lowinterestrates

supportedrisingprices.Thepricelevelhasnotyetadaptedtoincreasedfinancingcosts.Themarketisinthebubbleriskzone(seespotlightZurichp.16).

Bycontrast,housepricesinGenevaarelessthan20%higherthantenyearsago.Betweenmid-2022andmid-2023,real

pricesstagnated.Theriskscoreisfarlowerthanin2013,

whenthemarketwasinbubbleriskterritory.Althoughthe

Rhone-citybenefitsfromitsinternationalstatus,theeconomicoutlookismixed,andpopulationgrowthremainssubduedasout-migrationtomoreaffordableregionsissignificant.How-ever,newbuildingpermitsareonlyabouthalftheir10-year

average,supportingpricelevelsinthemediumterm.

RealpricesinLondon’shousingmarkethavebeenona

downwardpathsinceBrexitin2016.Despitestructuralsupplyshortages,priceshavelaggedthenationwideaverage.Intheabsenceofstronginternationaldemand,housepricesremainunderpressureas—duetohighmortgagerates—localafford-abilityisatitsworstsince2007.Additionally,demandforbuy-to-letinvestmentshasabated:Althoughrentshaveincreasedinnominalterms,theycouldnotoffsetrisingfinancingscosts.Themarketremainsinovervaluedterritory,inourview(see

spotlightLondonp.18).

Between2008and2021,fallingmortgagerateshavesup-

porteddemandforowner-occupiedhomesandledtoasharpriseinStockholm’srealhousingpricesbyalmost70%.The

surgewasmuchfasterthanthatoflocalincomesandrents,aswellashousingpricesinotherpartsofthecountry.Exces-sivehousingvaluationsandahighrelianceonvariable-rate

mortgagesturnedouttobeadangerouscocktail.Currently,affordabilityisstretchedandasaresult,betweenmid-2022

andmid-2023,inflation-adjustedpricescorrectedbyover

20%—morethaninanyothercityanalyzed.Themarketslidfrombubblerisktoovervaluedterritory.Thatsaid,demandforowner-occupiedhousingislikelytoshootupagainassoonasaffordabilityimproves.Theoverregulatedandundersupplied

rentalmarketisnotaviablealternativeformanyprospectiveowners.

RealhousepricesinWarsawincreasedbyalmost40%

between2012and2022.Thecityattractednewcitizens

andbuy-to-letinvestorsalike.Strongemploymentprospects,asubwayexpansion,andmodernhousingdevelopments

keptthemarketattractive.Againstabackdropofstrong

andpersistentinflation,mortgageratesspiked,reducinghouseholds’willingnesstopayforhomes.Thishasledinfla-tion-adjustedpricestodeclineabout10%withinayearandmoveddemandtotherentalsector,whichisseeingstronggrowth.However,newmortgagesubsidiesareaboutto

triggerabuyingfrenzy.

Historicaldevelopmentofindexscores

2.5

1.5

0.5

–0.5

–1.5

–2.5

8387919599030711151923

—ZurichGeneva

Source:UBS

8387919599030711151923

—London—Stockholm—Warsaw

Source:UBS

bubblerisk

overvalued

fair-valued

undervalued

depressed

8UBSGlobalRealEstateBubbleIndex2023

Regionalfocus

UnitedStates

Asaresultofthesharpriseinmortgageratesandrecord-lowaffordability,housingdemandhasweakenedsignificantlyin

theUScitiesweanalyzed.Butincomegrowth,alackofavail-ablefor-saleinventory,andastronglabormarkethavepre-

ventedameaningfulcorrectioninhomeprices.Nevertheless,inflation-adjustedpricesfellonaverageofallanalyzedUScitiesby2%betweenmid-2022andmid-2023,instarkcontrasttoanincreaseofalmost10%ayearago.Additionally,realrentalgrowthslowedsubstantiallyasthepandemic-induceddemandreceded,newsupplywasdeliveredinseveralmarkets,and

vacancyratesbottomedout.

WhileimbalancesinMiamiandNewYorkincreasedoverthelastfourquarters,housingmarketsinBoston,SanFrancisco,andLosAngelesrecordedlowerindexscores.

HousingpricesinMiamicontinuedtoincreasefasterthanthenationwideaverage.Thepricelevelhasmorethandoubled

overthelast10years.Miamiisthemainbeneficiaryofthe

increasedattractivityofsunbeltcitiesintheUS.Demandis

bolsteredbycontinuedpopulationinfluxandthestillrelativelylowabsolutepricelevelcomparedtoincomes.Havingsaid

that,salesnumbershavedroppedandtheupwardpressureonpriceshaseasedasmortgagerateswentup.

NewYorkisinthemiddleofastrongcomebackfollowingthemarket’ssignificantweaknessduringthepandemic’slockdownsasmanyinhabitantsleftthecityforlessdense,moreaffordableareas.Aftermultipleyearsoferoding

values,realpricesinthecity’shousingmarketincreased

by3%betweenmid-2022andmid-2023,outpacingthenationalaverageforthefirsttimesince2016(seespotlightNewYorkp.19).

Conversely,Boston’shousingmarketdynamicshaveweakened.Inflation-adjustedpricescorrectedslightlybetweenmid-2022andmid-2023whilerentsremainedroughlystable.Themar-ketislesssynchronizedwiththerestoftheUSduetoitshighdependencyonstartups,technology,andhealthcare—whichrecentlyunderperformedandthuswerelesssupportivefor

housingdemand.Overall,themarketisfairlyvalued,inourview.

ThereboundontheSanFranciscorealestatemarketwas

short-lived.Sincemid-2022,priceshavefallen10%andrentsdropped3%ininflation-adjustedterms.Themarketisnow

fairlyvalued,inourview.SanFranciscoisunderpressurefromquality-of-lifeissues,elevatedhybridworkpatterns,andcom-petitionwithsunbeltcitiesthatattracttechnologycompanies.Buildingpermitsareattheirlowestinadecade,butvacancyrateshaveremainedelevated.

ImbalancesintheLosAngeleshousingmarkethaveslightlysoftened,butthemarketremainsovervalued,inourview.

LosAngelesissufferingfromabroadlossofeconomiccom-

petitivityduetoitssignificantexposuretothetechnologyandentertainmentsectors,qualityoflifechallenges,adversetax

legislation,andhighcostsofliving.Asincomegrowthdisap-pointedandhousingaffordabilitydeteriorated,inventorylevelshavebeguntoclimb.

Historicaldevelopmentofindexscores

2.5

1.5

0.5

–0.5

–1.5

–2.5

8387919599030711151923

LosAngelesSanFrancisco

Source:UBS

8387919599030711151923

NewYorkBostonMiami

Source:UBS

bubblerisk

overvalued

fair-valued

undervalued

depressed

9UBSGlobalRealEstateBubbleIndex2023

Regionalfocus

Canada

Acombinationofstrongpopulationgrowth,attractivefinanc-ingconditions,highinvestmentdemand,andanurbansupplyshortagehavefueledthehousingbonanzainVancouverandTorontoforalmostaquarterofcentury.Realpricesmorethantripledinthesecitiesbetween2000and2022.Foryears,bothmarketswereflashingwarningsignalsaslocalpricelevels

decoupledfromthecountrywideaverageandclearlyoutpacedrentalgrowth.Duringthepandemic,thehousingboom

becameacountrywidephenomenonasstrongincomegrowthsupportedupsizingandmortgageratescontinuedtotrend

downward.Overall,betweenmid-2019andmid-2022,realpricesinVancouverincreasedby25%andbyalmost35%inToronto,whilehouseholdleverageroseatafastpace.

Insuchaheatedmarketenvironment,itdoesn’ttakemuch

forsentimenttochangequickly:Amixofincreasingfinancingcostsandhighermortgagestresstestratestippedthescales.OutstandingmortgagegrowthinCanadahasslowedtothe

lowestlevelsincethebeginningoftheboomin2000.The

numberofhousingsaleshasdroppedalmost40%,reachingitslowatthebeginningof2023.PricelevelsinVancouverandTorontohavecorrectedbymorethan10%ininflation-adjustedtermssincemid-2022.Wenowrankthesemarketsinoverval-uedterritory.

Asdemandforlivingspaceinthesecitiesisrisingsteadily,

thepressureisshiftingtotherentalmarket.InVancouver,

realrentshaveclimbedaround10%comparedtoayearago,whiletheyareagood5%higherinToronto.Bothcitieswereshowingsignsofhousingmarketrecoveryinthespringwithincreasingnumbersoftransactionsandpositivepricegrowth.Nevertheless,itisprematuretospeakofaturnaroundagainstthebackdropofrecentinterestratehikesfromtheBankof

Canada.

Historicaldevelopmentofindexscores

2.5

1.5

0.5

–0.5

–1.5

–2.5

bubblerisk

overvalued

fair-valued

undervalued

depressed

8387919599030711151923

TorontoVancouver

Source:UBS

10UBSGlobalRealEstateBubbleIndex2023

Regionalfocus

AsiaPacific

Between2003and2018,realhousepricesinHongKong

nearlyquadrupledwhileincomesstagnatedandrents

increasedbyjust50%ininflation-adjustedterms.Housingisbarelyaffordable:Askilledserviceworkerrequiresmorethan20timestheaverageannualincometobuya60sqmflat.Thecityhasconstantlybeenatbubblerisklevelssincethefirstedi-tionofthisstudyin2015.Afterdeclining7%betweenmid-2022andmid-2023,inflation-adjustedhousepricesinHongKongarebacktolevelslastseenin2017.Householdleveragestabilizedandrentshavebeenvirtuallyunchangedinthelastfourquartersaspopulationinflowincreased.However,high

mortgageratesandasloweconomicrecoveryinmainlandChinaputpressureonhousedemand.Overall,wenowseethecityinovervaluedterritory.Risinginventoriesareasignthatweaknessonthehousingmarketisgoingtopersistinthenearfuture.

Singapore’shousingsupplycannotkeepupwithstronglocalandinternationaldemand,whichbeganrisingsignificantlyin2018.Realpriceshaverisenby15%sincethen,despiteregu-latorytightening.However,thishasbeenputintoperspectivebyrents,whichhaveshotupbyroughly40%inthesame

period.Overall,thehousingmarketisfairlyvalued,inourview(seespotlightSingaporep.20).

HousingmarketimbalancesinTokyohaveincreasedfrom

undervalued20yearsagotobubblerisknow.Realestate

priceshavebeenrisingalmostcontinuouslyforovertwo

decadesanddecoupledfromtherestofthecountry,bolsteredbyattractivefinancingconditionsandpopulationgrowth.

Internationalinvestorshavebeenattractedbythedefensive

qualitiesofTokyo’sresidentialmarket,heatinguptheprice

growth.Moreover,asnetimmigrationhasweakenedsince

thepandemic,rentsstartedtofallin2020,aggravatingimbal-ances.Widespreadhomeofficesandhigheravailabilityof

largerunitsmadepeopleleavethecitycenter.Although

incomegrowthcouldnotkeeppace