The high price of Toronto’s real estate landed it a spot on the podium of the world’s most overvalued property markets.
Toronto is second — behind first-place Munich — on a list of seven bubble risk cities, warns a new report from United Bank of Switzerland AG.
The global real estate bubble index 2019, put out by UBS, is “designed to track the risk of property price bubbles in global cities,” the bank says.
Hong Kong ranked third, followed by Amsterdam, Frankfurt, Vancouver, and Paris.
UBS defines a bubble risk, in part, as one which indicates “a substantial and sustained mispricing of an asset.”
Enter the city of Toronto.
“Real Housing prices in the city almost tripled between 2000 and 2017,” the reports states.
The report speaks about a few of the measures taken to combat the city’s rising housing costs.
“As in Vancouver, local authorities introduced a foreign-buyers tax, rent controls and tighter mortgage standards to tackle worsening affordability.”
Referring to sixth-place Vancouver, the report stated: “Sky-high valuations and overstretched affordability have made the market vulnerable to even minor demand shifts.”
If you purchased residential property in Toronto during the last 40 years you will have enjoyed long-term capital gains, the report states.
Three reasons for this are a technology boom driving economic growth, an increased number of wealthy households and benefits from a decline in real interest rates in the 1990s.
Please share this
No comments:
Post a Comment