residential property price bubble
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Housing Market
Housing bubble trouble in London
London has been named as the world’s riskiest for a housing bubble after fresh data revealed that the average price of a home in the capital had hit £500,000 in September, up 10 per cent year-on-year. UBS said last week that the property market in London has formed the world’s biggest residential property price bubble, based on property prices to incomes, and property prices to rents, which are both at record highs. The Swiss bank waned that the UBS Global Real Estate Bubble Index points to the risk of a “substantial price correction” in London’s property market should the fundamentals for residential property investment in the city deteriorate. The average price of a residential property in London reached £499,997 in September, according to the Land Registry, up 10 per cent on a year earlier. UBS said that London’s housing market is now the world’s least affordable, bar Hong Kong, which UBS ranks as the second-most likely city to have a property bubble. “Foreign demand (for homes in London) and demand deriving from safe-haven seekers largely explain current valuations. Global geopolitical risk and the high property valuations in Asian cities have helped to propel London house prices to new heights,” UBS…
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