Photo by John Unwin on Unsplash

Swiss bank UBS has compiled the numbers, and they don’t look good for the Toronto real estate market.

According to the bank’s global real estate bubble index, Toronto is the world’s second most overvalued real estate market, trailing only Munich, Germany. Other members of the top five include Hong Kong, Amsterdam, and Frankfurt. Another Canadian city made the top 10, with Vancouver slotting in at sixth.

Reasons for Toronto’s prominent ranking include the fact its real estate tripled between 2000 and 2017 — without a corresponding rise in personal income — as well as the market’s resiliency, despite actions taken by governments to limit price increases. Despite a foreign buyer’s tax and changes to mortgage qualification standards, Toronto’s housing market keeps on marching higher.

Naysayers have been saying for years that Toronto real estate is in a bubble, pointing to metrics like the market’s sky-high price-to-income ratio and the minuscule return on investment offered by renting out a well-located condo. The factors identified by UBS are just the icing on the cake, at least according to bears.

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