Swiss real estate risk falls two quarters in a row, says UBS

Prices are considered balanced when the index reaches zero. Between zero and 1 is considered a price boom, between 1 and 2 is considered at risk and above 2 a bubble. At the end of 2017 the index sat at 1.32, still in the zone where there is a risk of a price correction.

The recent fall was driven by slow growth in mortgage lending (+2.6%), considerably below the 10-year average of 3.8%. The bank did note that growth in mortgage lending might be underestimated. Insurers and pension fund have entered the mortgage market with guns blazing, however their lending reporting is inadequate, according to the bank.

UBS real estate bubble index Q4 2017

The map above shows regions at risk in burgundy. The areas in brown have seen price falls since 2014.