![]() ![]() Toronto’s home prices have been rising steadily for years now, and many, including UBS, believe that the city is now firmly in bubble territory. Toronto, Canada’s largest city, finds itself at the top of a ranking no city wants to end up on. In the 2022 edition of the Real Estate Bubble Index, nine of the cities covered were classified as having extreme bubble risk (1.5 or higher score). (The whole report is available at that link.) The map above, based on data from the Real Estate Bubble Index by UBS, examines 25 global cities, scoring them based on their bubble risk. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making. One common red flag is when prices decouple from local incomes and rents. ![]() Of course, once a bubble bursts, it’s all obvious in hindsight. ![]() As a market gathers steam and prices increase, it remains a matter of debate whether that market is overvalued and flooded with speculation, or it’s simply experiencing robust demand. ![]()
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