Bank bubble ready to burst doesn't threaten Milan: reasons.

Since abandoning the idea of an imminent property crisis does not mean ruling out a housing crisis, Milan, in terms of real estate, can be considered safe for the moment.

In the capital of Lombardy, house prices seem to reflect their real value, and consequently, real estate sale prices - albeit skyrocketing - are in line with the good prospects of the local economy. This message, coming from a study conducted by the research center of the Swiss bank UBS, reassures people who have recently decided to buy property in the center of Milan: under the skies of the Duomo cathedral, there is no ready-to-burst gathering property' 'bubbles.

Recovering from Expo 2015, home prices in Milan continue to rise, relying on stable demand and a real estate construction program, but not only on them, but also on their appreciation and, in fact, expansion. Regarding the tricolor metropolis, the study notes: "a robust economy, new developments and a favorable tax system are supporting housing demand (...). Real prices have declined by 2%, in line with rent growth and real local income. We believe the market is still priced correctly, virtually unchanged from last year.

The less optimistic outlook concerns the cities of Zurich and Tokyo, where the real estate sales situation is, on the contrary, out of control, unlike Milan, but also New York, Boston and Madrid (to name a few). The property bubble, caused by the instability of costs unjustified to justify such high rates, and which according to Treccani "in general should lead to a decline in property values and exhaustion in a relatively short period of time," is ready to burst, leading to a fall in housing values and locking in demand.

In Zurich in particular, the ratio between buy-to-rent prices appears unbalanced, with house values up 40% compared to a decade ago, while rents' 'payments rose by only 12%. Similarly, in Tokyo, pre-pandemic house price growth has failed to respond to recent declines in immigration, falling rents, and the gradual abandonment of workspaces supported by remote working, with people moving out of the city center. This imbalance, reinforced by relatively low interest rates, could undermine the resilience of the market.

Milan, meanwhile, insists (and stands his ground).