Tokyo ranks second worldwide for housing-bubble risk, UBS report shows
A UBS study placed Tokyo just behind Zurich as the second most vulnerable city to a housing-price correction, with central apartments costing over ten times a skilled worker’s annual income.
According to the latest UBS Global Real Estate Bubble Index, Tokyo is the second most exposed city to a housing-price correction, trailing only Zurich. The index, which surveys 23 major markets, found that buying a 60-square-metre apartment near Tokyo’s centre now requires more than ten years of income for a typical skilled service worker. While household purchasing power, international migration and foreign investment continue to buoy demand, soaring prices are prompting a shift toward suburban living and rental units.
The study highlighted that price-to-income ratios have also surpassed ten in Seoul, Singapore and other locales, and that Hong Kong now reaches about fifteen years of income. UBS warned that further rises in financing costs could trigger a correction in Tokyo’s market, despite expectations of sustained demand for high-quality central condos driven by rising female labor participation.
Why it matters
The ranking signals that Tokyo’s housing market may face a sharp correction, affecting buyers, renters and the broader economy.
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