Toronto real estate poses bubble risk, while Vancouver overvalued

Photo: The Canadian Press

A sold sign is shown in front of west-end Toronto.

UBS says Toronto is one of seven world cities most at risk of a residential real estate bubble.

Toronto scored 1.96 in the UBS Global Real Estate Bubble Index, the third-highest score below Frankfurt and Munich, which scored 2.26 and 2.35, respectively.

The bank's report scores 25 cities across the world, sorting them into four tiers: bubble risk, overvalued, fair valued, and undervalued with higher scores going to locations with higher risk.

Toronto is in the bubble risk category for the third consecutive year, surpassing Hong Kong, Paris and Amsterdam.

UBS says Vancouver real estate had dropped this year out of bubble risk territory but is still overvalued, with a score of 1.37, down from 1.92 in 2018.

Other overvalued cities in the report were New York, San Francisco and Sydney, Australia with scores less than 1, while Boston, Singapore and Dubai had fair real estate values and Chicago real estate was considered undervalued.