A study conducted by the Swiss International Bank UBS shows that all the 25 largest real estate markets showed an average increase in the risk of creating a price bubble. All except Dubai.
The emirate market is undervalued and has the lowest risks of a price bubble. The UBS General Investment Office provided such data.
Overall, property prices continue to fall, making the purchase of real estate affordable. Low mortgage interest rates, high oil prices, and a general recovery contribute to this situation.
Despite the record expansion of the real estate market, the total number of new projects this year has also declined, which has had a positive impact on the chronic oversupply of housing in Dubai.
The average risks of price bubbles are growing in all major real estate markets and increasing the chances of a sharp correction soon. Frankfurt, Toronto, and Hong Kong were the most at risk.
Nevertheless, the emirate’s market will only accelerate its recovery in the future and lead to sharp price inflation.
The Property Finder portal indicates that the 3rd quarter of 2021 generated an $11.53 billion profit from 15,926 real estate transactions. These figures made this the best third quarter in the emirate’s history.
Compared to the 3rd quarter of 2020, transaction volume growth amounted to 85.36%, and cost growth increased by 135.4%.
UBS points out that the global real estate market is increasingly dependent on low-interest rates on loans.
At present, the population debt in most countries is still significantly below historical highs, so it is unlikely that real estate will have a strong negative impact on the global financial market.