2 October 2017
The property market in cities worldwide is still overpriced, but there is an important exception: Milan. It’s stated on the yearly Ubs report, Global Real Estate Bubble Index. According to the report, the cities risking a property bubble would be Toronto (Canada) at first place, followed by Stockholm (Sweden), Munich (Germany), Vancouver (Canada), Sydney (Australia), London (UK), Hong Kong, and Amsterdam (Netherlands).
“The improvement of the general economic situation, partly accompanied by the solid growth of the salaries in the main cities, combined with excessively low funding costs, led to a high demand for accommodations in the metropolis”, explained Claudio Saputelli, head of Global Real Estate of the Chief Investment Office of UBS Wealth Management.
According to Ubs, prices are destined to grow in Milan too, even though at the moment prices are 30% lower than those in 2007, due to the persistence of the economic recession in Italy. Assuming a qualified professional working in the service sector, he’ll have to work for 5.7 years to afford a 60 Sq m apartment. Therefore, Milan is one of the most convenient cities for what concerns properties. For the future, Ubs expects the economic recovery to fuel occupation and salaries in Lombardy, hence the house prices will rise fast.
The index developed by Ubs to monitor the real estate prices of cities worldwide shows great increases for Amsterdam, Frankfurt, and Munich. London is still risking a property bubble, even though the risk level has lowered compared to the period before the Brexit referendum. Zurich and Geneva in Switzerland appear to be moderately overpriced.
Translator: Cristina Ambrosi