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.
