Tokyo (SCCIJ) – Zurich and Tokyo are the only two cities classified as being at high risk of a housing bubble in the latest UBS Global Real Estate Bubble Index. Zurich ranks first in the 2026 index, followed by Tokyo, among the 23 major cities analyzed by UBS.
Zurich’s housing market remains particularly tight, with vacancy rates close to zero and the supply of owner-occupied housing well below historical levels. According to UBS, Zurich has recorded the strongest increase in real housing prices among the cities covered by the index over the past 20 years. Strong economic competitiveness, low financing costs and continued demand from international talent are among the factors supporting the market. UBS also points to demand from the city’s technology and artificial intelligence sectors.
At the same time, the price-to-rent ratio in Zurich has continued to rise, leaving the market increasingly sensitive to changes in financing conditions.
Tokyo is similarly classified as being at high risk of a housing bubble. UBS reports that real housing prices have increased substantially in recent years, significantly outpacing income growth. Demand has been supported by higher household purchasing power, international migration and foreign interest in prime residential properties.
However, affordability has become an increasing constraint in Tokyo. UBS notes that higher housing costs are encouraging some residents to consider suburban areas and rental housing, while higher financing costs could reduce the attractiveness of home ownership and investment.
UBS emphasizes that a high bubble-risk classification does not predict when or whether a correction will occur. Rather, the index identifies housing markets where existing imbalances could make prices more vulnerable to a correction. For both Zurich and Tokyo, the 2026 index highlights strong price growth and growing affordability pressures, while the underlying market conditions differ between the two cities.
Source: SCCIJ based on press material of UBS
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