UBS crowns German Cities Bubble Weltmeister
UBS just published at end of September their updated Real Estate Bubble 2020 Index
Low mortgage rates have boosted the price to rent ratio of trophy real estate in Munich and Frankfurt. German trophy real-estate is now more in bubble territory than Hong Kong or Vancouver according to UBS
The ranking below takes into account affordability, rental yield and price change over the last 10 years. Hong Kong is still the most unaffordable (defined as median price over median income), but Zurich, Munich, Stockholm and Vancouver have lowered rental yields faster than Hong Kong.
So the case that UBS makes is more based on change than on fundamentals.
We already touched on affordability in this 2017 post. What changed now is that Germany emerged as a Bubble due to prices moving up regularly for the last 10 years. Hong Kong is still less affordable and lower yield than Munich.
The report is available here
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