World Economy

London, HK Face Housing Bubble Risk

London, HK  Face Housing Bubble RiskLondon, HK  Face Housing Bubble Risk

Majority of the prime cities across the globe are either overvalued or in danger of a housing bubble with London and Hong Kong facing the greatest risks, according to a report, TradeArabia reported. Real estate prices in many global cities have doubled since 1998 in real terms. On average, they are higher than before the 2007-08 financial crisis, stated Swiss bank UBS in its report which analyzes residential property prices in 15 select cities around the world. Cities at or near the bubble risk zone face a higher risk of large price corrections. A change in macroeconomic momentum, a shift in investor sentiment or a major supply increase could trigger a decline in house prices, it added. According to the UBS Global Real Estate Bubble Index, the London housing market is in bubble-risk territory with a score of 1.88. The price-to-income and price-to-rent ratios in the British capital have reached all-time highs. Only Hong Kong exhibits worse affordability levels, stated the report.