Dubai real estate bubble risk: Swiss bank warns.

The real estate prices in Dubai are fairly valued despite the highest growth among all major cities. According to the UBS Global Real Estate Bubble Index 2023, Dubai's housing market is fairly valued despite its reputation as a geopolitical haven, which has recently caused a surge in demand for both renting and buying.

Dubai real estate prices have risen the most among all major cities over the past four quarters, the Swiss bank said, adding that prices will remain stable in the coming months as the hot rental market offers investors and landlords high returns.

In the study, UBS analyzed residential real estate prices in 25 major cities around the world. Property prices in the emirate rose at a rate of close to 17 percent in the annual June report, the highest in a decade. At the same time, rents rose even faster, by 22.6 percent, according to global real estate consultancy CBRE.

Interest in the local real estate market has grown significantly since the government successfully overcame the pandemic, attracting high-income individuals from around the world. "In Dubai, real house prices continue to rise at double-digit rates.

The Swiss bank pointed out that Zurich and Tokyo are still in the real estate bubble risk category, so investors should be very cautious when putting money into these two markets. He added that Toronto, Frankfurt, Munich, Hong Kong, Vancouver, Amsterdam and Tel Aviv, previously at risk of a bubble, are now all in the revaluation zone. The bank noted that the seeds of the next real estate price hike have already been laid in some cities. "Hybrid work has not dampened demand for urban living in a lasting way, and housing shortages are likely to intensify as fewer building permits have recently been issued, especially in European urban centers," the report said.