UBS: Asia’s Real Estate Hotspots Face Rising Bubble Risks
Asia’s property markets are under fresh scrutiny in the 2025 UBS Global Real Estate Bubble Index, with Tokyo flagged among the highest-risk cities worldwide and Hong Kong topping the list as the least affordable market.
Tokyo has seen inflation-adjusted home prices jump 35 percent over the past five years, outpacing both rents and incomes. Population growth driven by international migration is fueling offshore demand, further stretching affordability.
«Tokyo’s home prices continue to outpace the national average, with affordability eroding,» UBS noted in its newest Global Real Estate Bubble Index published on Tuesday.
Hong Kong Remains the World’s Priciest
Hong Kong stands out as the least affordable city in the study, requiring nearly 14 years of income to purchase a modest 60-square-meter apartment.
The UBS report warns that «tougher rules, from new taxes to outright purchase bans to rent control measures, have dimmed the appeal» of markets such as Hong Kong, Singapore, and other global hubs.
Regulation Looms as Prices Decouple
Price-to-income ratios above 10 in Tokyo, Paris, and London highlight how far property prices have decoupled from local earnings.
UBS analysts caution that as affordability pressures intensify, Asian regulators may step in with additional cooling measures, potentially reshaping investor strategies.
Outlook: Structural Demand vs. Policy Risks
Despite affordability challenges, Asian housing markets continue to attract international buyers and capital. Limited supply in dense urban centers and potential rate cuts by 2026 could keep demand buoyant.
But with debt levels high and regulation tightening, UBS warns that the region’s property outlook remains a delicate balance of opportunity and risk.
