Markets
These Global Cities Show the Highest Real Estate Bubble Risk
These Global Cities Show the Highest Real Estate Bubble Risk
Housing bubbles are a tricky phenomenon. As a market gathers steam and prices increase, it remains a matter of debate whether that market is overvalued and flooded with speculation, or it’s simply experiencing robust demand.
Of course, once a bubble bursts, it’s all obvious in hindsight.
One common red flag is when prices decouple from local incomes and rents. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.
The map above, based on data from the Real Estate Bubble Index by UBS, examines 25 global cities, scoring them based on their bubble risk.
Overinflated Markets
In the 2022 edition of the Real Estate Bubble Index, nine of the cities covered were classified as having extreme bubble risk (1.5 or higher score).
Rank | Risk Category | City | Bubble Index Score |
---|---|---|---|
#1 | 🔴 | 🇨🇦 Toronto | 2.24 |
#2 | 🔴 | 🇩🇪 Frankfurt | 2.21 |
#3 | 🔴 | 🇨🇭 Zurich | 1.81 |
#4 | 🔴 | 🇩🇪 Munich | 1.80 |
#5 | 🔴 | 🇭🇰 Hong Kong | 1.71 |
#6 | 🔴 | 🇨🇦 Vancouver | 1.70 |
#7 | 🔴 | 🇳🇱 Amsterdam | 1.62 |
#8 | 🔴 | 🇮🇱 Tel Aviv | 1.59 |
#9 | 🔴 | 🇯🇵 Tokyo | 1.56 |
#10 | 🟠 | 🇺🇸 Miami | 1.39 |
#11 | 🟠 | 🇺🇸 Los Angeles | 1.31 |
#12 | 🟠 | 🇸🇪 Stockholm | 1.22 |
#13 | 🟠 | 🇫🇷 Paris | 1.21 |
#14 | 🟠 | 🇦🇺 Sydney | 1.19 |
#15 | 🟠 | 🇨🇭 Geneva | 1.14 |
#16 | 🟠 | 🇬🇧 London | 1.08 |
#17 | 🟠 | 🇺🇸 San Francisco | 0.78 |
#18 | 🟠 | 🇺🇸 Boston | 0.75 |
#19 | 🟠 | 🇪🇸 Madrid | 0.59 |
#20 | 🟠 | 🇺🇸 New York | 0.57 |
#21 | 🟠 | 🇸🇬 Singapore | 0.50 |
#22 | 🟢 | 🇮🇹 Milan | 0.34 |
#23 | 🟢 | 🇧🇷 Sao Paulo | 0.20 |
#24 | 🟢 | 🇦🇪 Dubai | 0.16 |
#25 | 🟢 | 🇵🇱 Warsaw | 0.15 |
Canada’s largest city finds itself at the top of a ranking no city wants to end up on. Toronto’s home prices have been rising steadily for years now, and many, including UBS, believe that the city is now firmly in bubble territory.
Vancouver also finds itself in a similar position. Both Canadian cities have a high quality of life and have thriving tech industries.
Notably, none of the U.S. cities analyzed find themselves in the most extreme bubble risk category. The closest scoring U.S. city was Miami, which sits firmly in overvalued territory (0.5-1.5 range) with a score of 1.39.
Examining the Trends
In recent years, low interest rates helped push home prices and incomes further apart.
For cities in the bubble risk zone, prices have climbed by an average of 60% in inflation-adjusted terms over the past decade, while rents and real incomes increased by just 12%. And, while COVID-19 briefly put a dent in urban demand, rents in the cities analyzed rose at around the same pace as pre-pandemic times.
As a result, all but three of the cities saw positive price growth over the past year from a nominal price perspective:
U.S. cities occupy a number of spots at the top of this chart. Miami, in particular, is seeing strong internal migration patterns, as well as renewed interest from foreign investors.
Hong Kong experienced the biggest one-year nominal drop of all the cities analyzed. The report notes that since around 2019 Hong Kong “has broadly stagnated as the lack of affordability, economic woes, and pandemic restrictions all took a major toll on demand.”
Prices can’t rise forever. According to UBS, most cities with high valuations, price corrections have already begun, or could be right around the corner.
Mining
Ranked: The World’s Top Diamond Mining Countries, by Carats and Value
Who are the leaders in rough diamond production and how much is their diamond output worth?

Ranked: World Diamond Mining By Country, Carat, and Value
Only 22 countries in the world engage in rough diamond production—also known as uncut, raw or natural diamonds—mining for them from deposits within their territories.
This chart, by Sam Parker illustrates the leaders in rough diamond production by weight and value. It uses data from Kimberly Process (an international certification organization) along with estimates by Dr. Ashok Damarupurshad, a precious metals and diamond specialist in South Africa.
Rough Diamond Production, By Weight
Russia takes the top spot as the world’s largest rough diamond producer, mining close to 42 million carats in 2022, well ahead of its peers.
Russia’s large lead over second-place Botswana (24.8 million carats) and third-ranked Canada (16.2 million carats) indicates that the country’s diamond production is circumventing sanctions due to the difficulties in tracing a diamond’s origin.
Here’s a quick breakdown of rough diamond production in the world.
Rank | Country | Rough Diamond Production (Carats) |
---|---|---|
1 | 🇷🇺 Russia | 41,923,910 |
2 | 🇧🇼 Botswana | 24,752,967 |
3 | 🇨🇦 Canada | 16,249,218 |
4 | 🇨🇩 DRC | 9,908,998 |
5 | 🇿🇦 South Africa | 9,660,233 |
6 | 🇦🇴 Angola | 8,763,309 |
7 | 🇿🇼 Zimbabwe | 4,461,450 |
8 | 🇳🇦 Namibia | 2,054,227 |
9 | 🇱🇸 Lesotho | 727,737 |
10 | 🇸🇱 Sierra Leone | 688,970 |
11 | 🇹🇿 Tanzania | 375,533 |
12 | 🇧🇷 Brazil | 158,420 |
13 | 🇬🇳 Guinea | 128,771 |
14 | 🇨🇫 Central African Republic | 118,044 |
15 | 🇬🇾 Guyana | 83,382 |
16 | 🇬🇭 Ghana | 82,500 |
17 | 🇱🇷 Liberia | 52,165 |
18 | 🇨🇮 Cote D'Ivoire | 3,904 |
19 | 🇨🇬 Republic of Congo | 3,534 |
20 | 🇨🇲 Cameroon | 2,431 |
21 | 🇻🇪 Venezuela | 1,665 |
22 | 🇲🇱 Mali | 92 |
Total | 120,201,460 |
Note: South Africa’s figures are estimated.
As with most other resources, (oil, gold, uranium), rough diamond production is distributed unequally. The top 10 rough diamond producing countries by weight account for 99.2% of all rough diamonds mined in 2022.
Diamond Mining, by Country
However, higher carat mined doesn’t necessarily mean better value for the diamond. Other factors like the cut, color, and clarity also influence a diamond’s value.
Here’s a quick breakdown of diamond production by value (USD) in 2022.
Rank | Country | Rough Diamond Value (USD) |
---|---|---|
1 | 🇧🇼 Botswana | $4,975M |
2 | 🇷🇺 Russia | $3,553M |
3 | 🇦🇴 Angola | $1,965M |
4 | 🇨🇦 Canada | $1,877M |
5 | 🇿🇦 South Africa | $1,538M |
6 | 🇳🇦 Namibia | $1,234M |
7 | 🇿🇼 Zimbabwe | $424M |
8 | 🇱🇸 Lesotho | $314M |
9 | 🇸🇱 Sierra Leone | $143M |
10 | 🇹🇿 Tanzania | $110M |
11 | 🇨🇩 DRC | $65M |
12 | 🇧🇷 Brazil | $30M |
13 | 🇱🇷 Liberia | $18M |
14 | 🇨🇫 Central African Republic | $15M |
15 | 🇬🇾 Guyana | $14M |
16 | 🇬🇳 Guinea | $6M |
17 | 🇬🇭 Ghana | $3M |
18 | 🇨🇲 Cameroon | $0.25M |
19 | 🇨🇬 Republic of Congo | $0.20M |
20 | 🇨🇮 Cote D'Ivoire | $0.16M |
21 | 🇻🇪 Venezuela | $0.10M |
22 | 🇲🇱 Mali | $0.06M |
Total | $16,290M |
Note: South Africa’s figures are estimated. Furthermore, numbers have been rounded and may not sum to the total.
Thus, even though Botswana only produced 59% of Russia’s diamond weight in 2022, it had a trade value of nearly $5 billion, approximately 1.5 times higher than Russia’s for the same year.
Another example is Angola, which is ranked 6th in diamond production, but 3rd in diamond value.
Both countries (as well as South Africa, Canada, and Namibia) produce gem-quality rough diamonds versus countries like Russia and the DRC whose diamonds are produced mainly for industrial use.
Which Regions Produce the Most Diamonds in 2022?
Unsurprisingly, Africa is the largest rough diamond producing region, accounting for 51% of output by weight, and 66% by value.
Rank | Region | Share of Rough Diamond Production (%) | Share of Rough Diamond Value (%) |
---|---|---|---|
1 | Africa | 51.4% | 66.4% |
2 | Europe | 34.9% | 32.9% |
3 | North America | 13.5% | 52.8% |
4 | South America | 0.2% | 2.4% |
However diamond mining in Africa is a relatively recent phenomenon, fewer than 200 years old. Diamonds had been discovered—and prized—as far back as 2,000 years ago in India, later on spreading west to Egyptian pharaohs and the Roman Empire.
By the start of the 20th century, diamond production on a large scale took off: first in South Africa, and decades later in other African countries. In fact between 1889–1959, Africa produced 98% of the world’s diamonds.
And in the latter half of the 20th century, the term blood diamond evolved from diamonds mined in African conflict zones used to finance insurgency or crime.
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