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"The housing market in Tel Aviv is out of balance, in the area of overestimation"
The UBS Global Real Estate Bubble Index gives Tel Aviv an overestimation rating: "The ability to buy apartments is stretched to the limit." Dubai, on the other hand, has become a city of opportunities
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Wednesday, 30 September 2020, 11:01
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In the video: Netanyahu refers to the indices for ending the closure (Photo: PM spokeswoman)
The UBS Global Real Estate Bubble Index for 2020, an annual study produced by UBS Global Wealth Management's chief investment officer, signals a risk of bubble formation or a significant overestimation of housing markets in half of the cities surveyed.
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To the full article
UBS has analyzed residential real estate prices in 25 major cities around the world
The highest risks to the bubble are in Europe, where the housing market in Tel Aviv is in the over-assessment area
Despite the expected weakness in the short term, prices are on their way to an all-time high in the medium term
However, the epidemic increases long-term uncertainty in the context of urban housing
The euro area stands out as the area where the housing markets are the hottest.
Munich and Frankfurt are at the top of the table.
Paris and Amsterdam are close behind, and are also marching in the risk zone for the bubble alongside the two German cities.
Similarly, Zurich, Toronto and Hong Kong also show great imbalance.
Unlike last year, the Vancouver housing market is now within the spectrum's overestimation range, sharing the same territory with London, San Francisco, Los Angeles, and to a lesser extent, New York.
Estimating housing prices in Boston, Singapore and Dubai remained fair.
The same is true of Warsaw, which was included in this study for the first time.
Chicago still suffers from underestimation, and lies alone at this end of the scale.
Price increases (after adjusting for inflation) have accelerated on average in the last four quarters.
In many of the most prominent cities in Europe, prices have soared by more than 5%, with Munich, Frankfurt and Warsaw leading the way.
Rising prices in cities in Asia and the Americas, with the exception of Sydney, remained in the low-to-medium single-digit range.
Madrid, San Francisco, Dubai and Hong Kong are the only ones where prices have fallen.
This is the lowest number of cities that have shown a negative price increase since 2006.
Tel Aviv continues to soar.
The UBS report
Caroline Conhart, Director of Central and Eastern Europe, Greece and Israel at UBS Global Wealth Management, said: "Over the past 30 years, Tel Aviv has experienced price growth that was among the highest among the cities participating in this study. "Limited housing is supposed to preserve the rise in apartment prices. Although this means that the ability to purchase apartments is stretched to the limit, it is also a sign of Tel Aviv's economic growth."
The government reduced the purchase tax on second homes and thus encouraged investment in the housing market.
In contrast to Tel Aviv, the real estate market in Dubai has reached a new cyclical low. Since the last peak in 2014, prices have fallen by more than 35%, and the rating is close to low price levels. Positive effects on the price of high population growth and more favorable mortgage regulation This is offset by the continued high growth in supply and low fuel prices.
Closed or not closed, real estate is not damaged. Tel Aviv this week (Photo: Reuven Castro)
The high market estimates and the uncertain expectations in the short term put the long-term urban housing route under focus.
On the one hand, the main drivers of the rise in urban housing prices - excellent employment opportunities, quality services, low financing costs and limited supply growth - are still valid.
But on the other hand, the epidemic seems to have accelerated the change in the direction of population movement - from the cities to the wider metropolitan areas around them.
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