The 2026 Global Real Estate Bubble Index from UBS finds that investment wealth is supporting demand in some prime markets even as high ownership costs limit housing access for households that rely on wages.
Across its 23-city sample, inflation-adjusted home prices rose an average 0.5% in the year to Q2 2026. At mid-2025, the annual increase was 1.4%. UBS says financial market gains have expanded some affluent buyers’ budgets, allowing them to cover more of a purchase upfront or pay in full. The bank points to San Francisco and Seoul as cities where AI-related wealth is influencing prime housing demand.
Seoul’s real home prices rose more than 10% over the year through Q2 2026, while Tokyo’s increased 6%. UBS links Seoul’s growth to AI-driven economic expansion. The report says housing access is particularly strained for workers whose buying power depends on wages; UBS calculates that annual costs of owning a newly purchased 60-square-meter home, including mortgage interest and maintenance, amount to over 40% of a highly skilled worker’s gross income in most cities. A skilled service worker can afford about one-third less living space than in 2021.
Zurich and Tokyo were the only cities above the index’s 1.5 high-risk threshold, scoring 1.69 and 1.54. In Zurich, real home prices rose almost 140% over the 20 years through Q2 2026, while rents climbed 40% and incomes 30%. UBS cites limited supply, low financing costs and demand from international professionals, particularly in technology and AI, as contributors to pressure there. London was in the low-risk category after real home prices fell more than 15% from their 2021 level.
UBS’s measure compares home prices with incomes and rents and considers signs of imbalances in credit and construction. It identifies vulnerabilities but does not predict whether or when prices will fall. Markets the index rated high risk in 2021 later saw average real home-price declines of roughly 15%.
Matthias Holzhey, lead author of the study and an economist at UBS Global Wealth Management’s Chief Investment Office, said, “Higher-for-longer financing costs are likely to cap house-price gains in the near term.”
The Federal Reserve held its target range at 3.75% to 4% on Oct. 28; two committee members favored a 0.25-percentage-point increase. The Fed’s next scheduled meeting is Dec. 8-9.
