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Toronto has highest housing bubble risk in the world: International report

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According to report by Swiss bank UBS, Toronto has the highest housing bubble risk in the world. It beats cities such as Frankfurt and Hong Kong. The UBS Global Real Estate Bubble Index ranked 25 major world cities based on the risk of market collapse.

Toronto is followed by Frankfurt, shows highly elevated risks due to imbalances in global metropolitan housing markets.

According to the report if a city receives a score higher than 1.5, that indicates the city was likely experience a housing bubble. Toronto received a score of 2.24, and Vancouver got a score of 1.70, making them the two most at-risk cities in North America.

The cities in the US were ‘overvalued’ but below the bubble risk level. Home prices have increased 14 % in Vancouver and 17% in Toronto compared to a year ago. The recent rate hikes by Bank of Canada could be the reason the housing bubble might burst.

According to the 25 cities analyzed, the report found nominal home prices rose an average of 10% from mid-2021 to mid-2022, the largest annual increase since 2007.

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