Zurich and Tokyo have been identified as ‘high risk’ cities for housing bubbles by UBS, in a report by the investment bank.
The two cities, which continue to attract many UHNWs, topped UBS’ global real estate bubble index for housing markets in 2026.
Zurich’s property market has become ‘increasingly dependent on persistently low interest rates’, UBS’ report said, while Tokyo’s market is ‘showing signs that the boom may be approaching its limits’.
[See also: Interest in ‘golden visas’ up sevenfold in a decade: where are UHNWs moving next?]
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For the purposes of its report, UBS defined a ‘bubble’ as the ‘substantial and sustained mispricing of an asset, the existence of which can be confirmed only after it bursts’.
Zurich continues to draw international talent to the city, UBS noted, ‘particularly in the fields of information technology and artificial intelligence’, but added that the housing market ‘remains exceptionally tight, with vacancy rates close to zero’.
Meanwhile, in Tokyo, ‘foreign investors continue to seek premium apartments in central Tokyo’, UBS said, with migration from abroad ‘essential to maintaining Tokyo’s population growth.
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In August, Spear’s exclusively reported that Cape Town is now tipped to overtake Tokyo as the strongest-performing city for prime residential property growth, according to Savills.
Savills had previously named Tokyo as 2025’s prime property hotspot, registering 30 per cent ‘prime capital value growth’ over the course of the year.
UBS’ findings will be of interest to UHNWs thinking of a potential relocation. Earlier this month, research showed that worldwide interest in ‘golden visas’ – residency or citizenship offered by countries to foreign investors – has risen sevenfold over the last decade.
In its report, UBS found that Lisbon – long one of the most popular destinations of choice for UHNWs – has seen rental growth stall, amid a ‘policy shift towards more selective immigration policies’ which the bank said had ‘contributed to negative population growth’.
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In 2023, Portugal significantly tightened its Golden Visa programme, ending the purchase of real estate as a route to securing a visa – although the scheme continues to offer visas to those who make other kinds of investment.
The UBS report found that London’s housing market ‘remained weak for a fifth consecutive year’ – and that the city has moved into ‘low bubble-risk territory’.
Dean Turner, and economist with UBS Global Wealth Management, commenting on London, said: ‘While international investors have been attracted by property prices and the relative weakness of sterling, stretched affordability remains a key barrier to sustained housing market recovery, which will depend on employment growth and rising income.
He added: ‘For investors, we affirm the continued value of a diversified portfolio to manage risk.’
