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15 International Cities That Are in a Housing Bubble Right Now

13 July 2021

There’s No Doubt That the Real Estate Industry Is on Fire. Check Out Which Cities Are In a Housing Bubble.

Bubble. The word conjures up happy childhood memories of innocence and fun. Place the word “housing” in front of it, and innocence and fun are gone. Here are 15 International Cities That are in a Housing Bubble Right Now.

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15

California

ManageCasa.com released the stats on the current housing market in California just a week ago and confirmed, “Year over year, the growth in California home sales and home prices is shocking…”

Epic Real Estate Investing listed several cities that would experience or are experiencing a housing bubble, which included Irvine, Santa Rosa, Fremont, San Mateo, and Redwood City.

Manage Casa claimed, “it is the lack of affordably priced home sales that is skewing California home prices upward.”

14

Vancouver

A headline on Bloomberg updated 15 June 2021 read, “World’s Second Bubbliest Housing Market Starts to Look Fatigued,” referring to Canadian homes.

In May 2021 Canadian home sales dropped for the 2nd month in a row. Bloomberg continued that; buyers are finding themselves priced out of the market with valuations so stretched. However, as lockdown measures are slowly lifted and people are getting vaccinated, the real-estate frenzy is slowing down.  

13

Sydney

Australia is ranked 15 when it comes to housing bubbles by Bloomberg Economics. It’s uncertain if property prices are going to continue rising at the exponential rate it’s currently experiencing.

The Sunday Morning Herald reported that “Free-standing property prices are in a bubble, with Sydney up close to 20% in the past year and similar properties in Melbourne up between 12% and 14%.” Louis Christopher, founder of SQM Research suggests that the market will continue to go up, especially with more buyers than sellers and interest rates remaining so low.

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12

New Jersey

TAP into Roselle/Roselle Park, a local news website in New Jersey, published an article in April 2021 stating, “New Jersey Residential Real Estate Experts: This Market Won’t Slow Down Anytime Soon.”

CEO of Prominent Properties Sotheby’s International Realty, Charles Oppler, told a TAPinto panel that “New Jersey experienced a 7.5% state-wide gain in units and a 15% increase in median sales price this past year. Demand is up so much that half of all state home sales in 2021 so far have closed above asking price.”

There are several cities experiencing this bubble, according to Northjersey.com, including Closter, Manalapan, Montclair and Westfield.

11

Zurich

Zurich has one of the world’s ‘riskiest’ housing markets, according to thelocal.ch. This is the first year that Zurich has been at risk of a housing bubble since 2014, according to UBS bank.

They confirmed that “Zurich recorded the strongest price growth rate of all Swiss economic regions in the last decade…”

However, the Swiss are not exactly a poor as you’ll find out when you watch our video How Rich Is Switzerland?

10

Hong Kong

At the end of 2020, Hong Kong Business said that “Hong Kong grapples with the third-highest risk of a housing bubble in the world, scoring 1.84 to tie with Amsterdam…”

Previously, Hong Kong had ranked number 1, but the housing bubble risk has now shifted to the Eurozone.

Property prices in Hong Kong have doubled over the last 10-years, and although the momentum has decreased a little, it’s still at a point where even skilled service-sector workers can’t buy a medium-sized flat.

9

Amsterdam

Currently in bubble risk territory is Amsterdam. Netherlandslive.com affirmed that “Three out of five Dutch people expect that the ‘housing bubble’ will collapse in a number of years.”

Willem-Jan Koudijs, franchisee of De Hypotheker in Utrecht, said “As a result of the soaring house prices and the housing shortage, it is almost impossible to get an affordable home.”

Iamexpat.nl further adds “The demand for housing grossly outweighs the supply, which continues to drive up prices. Indeed, housing in Amsterdam is so expensive that it has been awarded sixth place in the Global Real Estate Bubble Index 2020, beating the likes of London, New York and Singapore.”

8

Paris

Like Amsterdam, Paris is in bubble risk territory according to CNBC. As reported by Quartz, “wealthy buyers, especially, have over the last year found themselves with more cash and a desire for more space, driving up demand for new and existing housing across Asia, Europe, and the US.”

Paris is the most expensive place to live in France, with property prices around 60% more expensive than other areas such as Lyon and Bordeaux. Longtermrentalsinfrance.com states the average price per m2 is €10,460, compared to Lyon at €4,750 per m2.

The real-estate bubble index score for Paris was 1.68 according to UBS’ Global Real Estate Bubble Index 2020.

In case you’re thinking about investing in real estate, check out 15 Reasons Why Real Estate is the Best Investment.

7

New Orleans

The second oldest neighbourhood in New Orleans is seeing a massive increase in the cost of housing. As reported by nola.com, development has steadily increased in Algiers, particularly the Point, with more and more businesses opening up and more homes being developed, attracting more families. They continue, “Real estate prices are rising. While many Algiers neighbourhoods have seen price increases in recent years, the Point appears to be on an even steeper rise.”

6

Frankfurt

Stockapps.com states “Munich and Frankfurt Have the Highest Real Estate Bubble Risk in 2020.” And Aluxers, that has continued throughout 2021.

The UBS’ Global Real Estate Bubble Index 2020 confirmed that Frankfurt came second with a real-estate bubble index of 2.26. Study author, Matthias Holzhey, claims Frankfurt is a “victim of its own success.”

Long-term effects of the pandemic could see reduced rent and less of a need to live in the city centre.

5

Toronto

CNBC confirms that Toronto is the only major North American city at risk of a housing bubble. Writing for the Financial Post, George Fallis believes “It’s a housing bubble in Toronto, not a supply squeeze.”

Comparing the average house price in Toronto in 2020 to 2021 sees an increase of 16.7%. Overall, house prices in Toronto have increased by 10% every year for the past 5-years.

So, is it a housing bubble or a supply problem? Federal Reserve System former chairman, Alan Greenspan, says it’s only possible to realize it was a bubble after it bursts.

4

Maryland

How hard is it to get a home in Maryland? So hard, that one desperate home buyer offered to name her first-born after the seller of the house… and Aluxers, she didn’t get the house according to The Atlantic.

Much the same as our previous cities experiencing the housing bubble – Maryland homes are selling at record-high prices, inventory is at record lows, most homes sell at above asking price and the time homes spend on the market is minimal.  

3

Warsaw

Over in Poland, Warsaw is experiencing their own housing bubble. As reported by DW.com, “Rents remain stubbornly high for many people in Poland…”

Patrick Pieta, of real estate firm Hamilton May in Warsaw claims there have been massive price increases over the past 3-years and that a new bubble is developing.

In new builds, prices rose between 10% and 12% and by 6% in homes being sold on. This return is much better than popping your money into a bank account, claims Magdalena Topolska-Ziemak, of Deloitte in Warsaw.

2

Connecticut

CTpost.com reported, “Home prices continue to surge in Connecticut, where real-estate is red-hot.” Connecticut saw record home-sales in 2020, pushing the median-sale prices to record highs.

Real-estate research firm, Warren Group, confirmed a 16.6% jump from the previous years and the most Connecticut homes being sold since 2005.

Fox further affirmed that people know they’re paying too much for the houses, and that up to 50 plus people put in offers over the asking price.  

1

Munich

Topping the list of cities experiencing a housing bubble is Munich. Munich scored a real estate bubble index score of 2.35.

Thelocal.de brings forward that it’s a simple case of supply and demand.

Even before Covid, Munich was predicted to be the most overvalued in the global market due to three factors: it’s strong local economy, population growth and lack of housing.

Question:

What is your take on the cities experiencing housing bubbles at the moment? We value your input.