Toronto tops list of potential real estate bubbles

6 October 2017

This is the first time Toronto has been included in the annual ranking of the UBS World Bubble Index.

Toronto has risen to the top of a list of cities most at risk of experiencing a housing bubble in the world, while Vancouver took fourth place, according to a report published by UBS Group AB.

This was Toronto's first-ever annual ranking of the UBS Global Bubble Index. Other members of the top five "bubble risks" include Stockholm, Munich and Sydney.

The Swiss-based global financial services firm said real estate bubble risk in all of these cities had climbed significantly over the past five years and home prices had risen by an average of almost 50% since 2011.

In Toronto, Munich and Sydney, prices rose more than 10% in the past year alone. In Canada, much of the impact of rising home prices on accessibility has been dampened by low mortgage interest rates.

While house prices in Toronto and Vancouver rose while the depreciation of the Canadian dollar protected them against economic headwinds, UBS estimated that the loonie's strengthening and further interest rate hikes would " the party "in Toronto.

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