[Mark Stücklin]

Global Real Estate Bubble Index 2020 published by UBS rates Spanish capital as fair value for real estate

The Swiss bank UBS publishes an annual global city ranking of the real estate bubble risks, in which it compares house prices to incomes and rents in each city. The higher house prices are in relation to local incomes and rents, the bigger the risk of a bubble.

UBS have recently published their ranking for 2020, in which the Spanish capital Madrid is one of a minority of cities that gets a fair value ranking, meaning that house prices in the city are reasonably priced in relation to incomes and rents, with little risk of a sharp fall as happens when bubbles burst.

The German cities of Munich and Frankfurt are at the top of the bubble risk, whilst Chicago in the US looks too cheap, all according to UBS.

The Spanish property portal Idealista has taken UBS’s date to produce the following charts showing house prices in relation to incomes and rents. The first chart shows house prices in terms of annual salaries, and the second house prices in terms of years of rent. Madrid is at the low end of the scale on both.

Property prices in terms of annual salaries

Property prices in terms of annual rental incomes

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