Slumping home prices in the wake of high mortgage rates has a notable upside: It’s helping to correct housing market imbalances in major cities globally and move markets away from bubble territory, according to a report Wednesday from investment bank and financial services company UBS.
Cities in the bubble-risk zone last year, Toronto, Frankfurt, Munich, Hong Kong, Vancouver, Amsterdam and Tel Aviv, are now merely considered “overvalued.” They join the housing markets in Miami, Geneva, Los Angeles, London, Stockholm, Paris and Sydney, which continue to be overvalued.“In inflation-adjusted terms, prices are actually 5% lower now than in mid-2022,” said Claudio Saputelli, head of real estate at the firm’s Global Wealth Management’s Chief Investment Office.