Markets
Real Estate Bubbles: The 8 Global Cities at Risk
Note: cities with “Bubble Risk” (>1.5) are shown in red.
Courtesy: UBS
Real Estate Bubbles: The 8 Global Cities at Risk
If you had $1 billion to spend on safe real estate assets, where would you look to buy?
For many funds, financial institutions, and wealthy individuals, the perception is that the world’s financial centers are the places to be. After all, world-class cities like New York, London, and Hong Kong will never go out of style, and their extremely robust and high-density city centers limit the supply of quality assets to buy.
But what happens when too many people pile into a “safe” asset?
According to UBS, certain cities have seen prices rise at rates that are potentially not sustainable – and eight of these financial centers are at risk of having real estate bubbles that could eventually deflate.
Global Real Estate Bubble Index
Every year, UBS publishes the Global Real Estate Bubble Index, and the most recent edition shows several key markets in bubble territory.
The bank highlights Toronto as the biggest potential bubble risk, noting that real prices have doubled over 13 years, while real rents and real income have only increased 5% and 10% respectively.
However, the largest city in Canada was certainly not the only global financial center with real estate appreciating at rapid rates in the last year.
In Munich, Toronto, Amsterdam, Sydney and Hong Kong, prices rose more than 10% in the last year alone.
Annual increases at a 10% clip would lead to the doubling of prices every seven years, something the bank says is unsustainable.
In the last year, there were three key markets where prices did not rise: London, Milan, and Singapore.
London is particularly notable, since it holds more millionaires than any other city in the world and is rated as the #1 financial center globally.
Markets
Will Tesla Lose Its Spot in the Magnificent Seven?
We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.
Will Tesla Lose Its Spot in the Magnificent Seven?
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.
All figures are as of March 12, 2024, and are listed in the table below.
Rank | Company | YTD Change (%) |
---|---|---|
1 | Nvidia | 90.8 |
2 | Meta | 44.3 |
3 | Amazon | 16.9 |
4 | Microsoft | 12 |
5 | 0.2 | |
6 | Apple | -6.7 |
7 | Tesla | -28.5 |
From these numbers, we can see a clear divergence in performance across the group.
Nvidia and Meta Lead
Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.
The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.
Apple and Tesla in the Red
Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.
Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.
Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.
-
Money7 days ago
Visualizing All of the U.S. Currency in Circulation
-
Markets2 weeks ago
Ranked: South Korea’s Largest Companies by Market Capitalization
-
VC+2 weeks ago
What’s New on VC+ in March?
-
Economy2 weeks ago
Confidence in the Global Economy, by Country
-
Wealth2 weeks ago
Mapped: Where Do the Wealthiest People in the World Live?
-
Misc2 weeks ago
Ranked: Global Airlines with the Most Plane Crashes
-
Technology1 week ago
Visualizing iPhone 15 Production by Manufacturer in 2023
-
Automotive1 week ago
Visualizing Global Electric Vehicle Sales in 2023, by Market Share