Last year, Vancouver was “overvalued”; in 2016 it is the most at risk of a housing bubble. That’s the assessment of the Swiss bank UBS which has considered the risk in 18 major cities and puts Vancouver above the 2015 leader London, UK.
“Over the last two years, the housing market has gone into overdrive due to strong demand for local properties among foreign investors and a loose monetary policy. Currently, house prices in Vancouver seem clearly out of step with economic fundamentals and are in bubble risk territory,” the report warns.
The lender says that low interest rates along with foreign investors have contributed to the rise in Vancouver’s housing market. Other cities deemed to be in the bubble zone include Stockholm, Sydney, Munich and Hong Kong.
San Francisco is the only other North American city to be a potential problem but it is overvalued rather than a bubble-risk. New York is deemed to be balanced while Chicago is undervalued.
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