• UBS’s 2024 Global Real-Estate Bubble Index shows a decline in bubble risks over the last 12 months.
• Only six cities are now at elevated or high risk, down from 16 last year.
• Miami and Los Angeles are the two US cities most at risk of a housing bubble, the report said.

UBS released its 2024 Global Real-Estate Bubble Index report last week, and it showed bubble risks have generally declined over the last 12 months.

While 16 cities worldwide were considered to be at elevated or high risk of a real-estate bubble last year, just six cities fit that description today, the report said. That’s thanks to falling home prices in many cities that were considered overextended in 2023.

“Inflation-adjusted housing prices in the cities analyzed are now, on average, roughly 15% lower than in mid-2022, when interest rates started to surge globally,” the report’s authors, Claudio Saputelli and Matthias Holzhey, wrote.

“The cities recording the strongest price corrections are those that displayed a high risk of a real estate bubble in previous years,” they continued. “Real prices in Frankfurt, Munich, Stockholm, Hong Kong, and Paris are 20% or more below their post-pandemic peaks.”

To create its index, UBS considered local home price-to-income ratios, price-to-rent ratios, mortgage-to-GDP ratios, new construction-to-GDP ratios, and the ratio of home prices in a particular city compared to the rest of its country.

Cities with a score above 1.0 are considered to be at an elevated risk, and those with a score above 1.5 are considered high risk.

The six cities with scores above 1.0 are listed below in ascending order. Last year’s score is also included.

6. Geneva, Switzerland

UBS bubble risk score: 1

Risk level: Elevated

2023 score: 1.13

5. Toronto, Canada

UBS bubble risk score: 1.03

Risk level: Elevated

2023 score: 1.21

4. Los Angeles, California

UBS bubble risk score: 1.17

Risk level: Elevated

2023 score: 1.03

3. Zurich, Switzerland

UBS bubble risk score: 1.51

Risk level: High

2023 score: 1.71

2. Tokyo, Japan

UBS bubble risk score: 1.67

Risk level: High

2023 score: 1.65

1. Miami, Florida

UBS bubble risk score: 1.79

Risk level: High

2023 score: 1.38