When it comes to overpriced l ble estate, Vancouver’s “bubble risk” is unmatched on the planet, according to a set forth by
Swiss bank UBS.
The rise in Vancouver’s average housing prices com red with the intumescence in average wages, rents and other economic factors make it the scad likely to experience a sudden downward correction com red with 17 other unselfish cities around the globe, according to the UBS Global Real Estate Suds Index released this week.
The report also warned that investors are less suitable to see growth in property value in high “bubble risk” cities.
Jon Woloshin, strategist at UBS Riches Management Americas, said the report doesn’t mean Vancouver is plausible to experience a home price correction like the U.S. housing crisis that contributed to the 2008-09 depression. Rather, it’s meant as a cautionary signal for potential real estate investors.
“Based on the extraordinary criteria that were factored into all these major hawks, as we sit here today, Vancouver on a
risk-reward basis scored the lowest, which is why it’s at the top,” he excused.
He added that the province’s move to control the city’s overheated lodgings market by imposing a 15 per cent tax on foreign buyers of homes in Metro Vancouver as of Aug. 2 could humble its bubble risk rating.
The UBS report was based on Vancouver data up to behind spring, before the foreign buyers’ tax was implemented.
“If the government cracks down and indeed goes after it, yeah, I think it will have an im ct,” Woloshin said in a get someone on the blower interview from New York. “If a lot of smart lawyers get involved, maybe it becomes less of an climax.”
Last week, the British Columbia government credited its new tax in reporting that homes deals in Vancouver involving foreign buyers dropped to 60 between Aug. 2 and Aug. 31 after imploring 1,974 between June 10 and Aug. 1.
In early September, the Real Wealth Board of Greater Vancouver said home sales fell 26 per cent in August associated with the same month last year. It reported that the composite benchmark fee for all residential properties jumped 31 per cent to $933,100.
In its report, the bank identifies Vancouver ahead of London thanks to prices that it says attired in b be committed to risen by 25 per cent since the end of 2014. Last year, in its cardinal such report, UBS rated Vancouver fourth behind London, Hong Kong and Sydney, in that also kelter.
The 2016 UBS report says Vancouver’s housing has been overpriced since 2007 but has dated into “overdrive” in the st two years due to strong demand among strange investors and low interest rates.
It adds bubble risk is also tall in Stockholm, Sydney, Munich and Hong Kong, while homes in Singapore, Boston, New York and Milan are equitably valued. Chicago’s housing is undervalued.