If you’re thinking about buying a condo in Miami , you might want to hold off. According to a new report from UBS , Miami has the highest bubble risk among all the cities it surveyed globally. UBS ( UBS ) said that while the boom in Miami housing has “somewhat” cooled thanks to higher mortgage rates, prices in the city have risen by almost 50% since the end of 2019.
Seven percent of that growth happened in the last four quarters. “Price rises in recent years have strongly decoupled from income and rental growth, leading to significant imbalances in the residential property market and a high bubble risk,” UBS said. The Miami market, according to the report, has been fueled by rich people competing with each other for a select amount of luxury oceanfront property.
Another factor contributing to the high bubble risk is new regulatory requirements for condos older than 30 years, which has led to a flood of those properties on the market. And when interest rates further drop, “lower mortgage rates will likely bring significantly more existing inventory to market and potentially lead to some price erosion,” UBS said. Insurance costs are another factor creating high bubble risk, as plans continue to skyrocket due to climate change and environmental hazards, which UBS said “puts the future of Miami’s price levels into question.
” Other cities with a high bubble risk include Tokyo and Zurich, which rank second and third for the highest bubble risk. Los Angeles and T.