27 September 2018
London is in the top five cities most at risk of a housing bubble, according to a new report measuring the world’s most overpriced property markets.
Hong Kong was ranked as the place most susceptible to a swift downturn after years of soaring house prices, while Munich, Toronoto and Vancouver were also among the other most overvalued markets in UBS’s global real estate bubble index.
The report also made grim reading for those looking to jump onto the property ladder, with UBS predicting that those in London would have to work 15 years to afford a 60m2 flat, underling the capital’s chronic housing affordability crisis.
London came second only to Hong Kong, where the report estimates people would need to work for 22 years to afford a 60m2 flat in the Asian metropolis, compared with a decade ago, when it took 12 years on average.
The number of years a skilled service worker needs to work to be able to buy a 60m2 (650 sqft) flat near the city centre
Hong Kong - 22
London - 15
Paris - 14
Singapore - 12
According to the report, house prices in major cities have jumped on average by 35 per cent in the last five years, with economies benefitting from a combination of easy financing conditions, growing urbanisation and more wealthy households looking for safe assets in the most attractive residential areas.