Home prices in some of the world’s most expensive cities may be ready to lose their fizz. According to fresh analysis by UBS drawn from its Global Real Estate Bubble index, several European cities have surged into dangerous territory lately, fueled by low mortgage rates. The UBS index weighs five factors—such as price-to-income and change in mortgage-to-GDP—to assess the probability of a correction in specific markets. Price-to-rent ratios, for instance, have rocketed over the past decade in cities such as Munich and Zurich. But average price growth globally this year was the lowest since 2012. Falling prices could be next.
A version of this article appears in the November 2019 issue of Fortune with the headline “Analyzing Bubble Risk”
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