UBS On-Air: Market Moves Across the Pond: Dream Home or Bubble Trouble?
Oct 7, 2025
Matthias Holzhey and Maciej Skoczek, Zurich-based real estate experts from UBS Chief Investment Office, dive into the dynamics of overseas property investment. They discuss historical housing performance, the impact of inflation and public debt, and key metrics for assessing bubble risks. While highlighting cities like Miami and Tokyo as high-risk areas, they offer insights into practical considerations like currency management. Holzhey even shares favorite spots for second homes, advocating for diversification through mortgage financing. It's a compelling blend of aspiration and caution in global real estate!
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Define Your Purpose Before Buying
- Clarify why you buy: holiday use, university housing, or buy-to-let determine strategy and metrics.
- Assess rental potential, currency exposure, and fit with your overall wealth plan before buying.
Price In Illiquidity And Maintenance
- Expect illiquidity and ongoing maintenance costs when owning physical property.
- Factor in potential sale discounts for quick exits and additional upkeep expenses into returns.
Quantify Bubble Risk Not Certainty
- Bubble risk is probabilistic and assessed by indicators like rapid price growth and price-to-income ratios.
- Many global cities exceed safe price-to-income thresholds, signalling elevated bubble risk in some locations.