UBS released a new report that looked at a dozen or so cities that are in a housing bubble or that have an overvalued real estate market.
The two cities that are in a housing bubble: London and Hong Kong. The cities that are on the cusp of an official bubble are Vancouver, San Francisco, Sydney, Amsterdam and Geneva.
Thanks to accommodative monetary policy and easy money from central banks, the real estate market has become too expensive for the average person to enter. A tremendous price correction is coming and it’s going to be brutal, especially with so many households overleveraged.
Here is the chart:
What makes the numbers interesting is that Toronto is not on the list.
Like this article? Get ECN delivered to your inbox daily. Subscribe here.
Hi! Please pardon the question as it may seem very elementary to some, but I am fairly ignorant on this issue. Can someone explain what the article means by “households being overleveraged”? Is it that the banks have overleveraged by over inflating home values, or is it simply, the home owners themselves being upside down on all their debt?
Thank you for any explanations or opinions!