London Property Bubble Set To Burst – UBS and Deutsche Warn

The London property market is being increasingly recognized as a bubble and now even leading international banks are warning that the bubble may be set to burst.

Today, UBS has warned that London’s property market is “frothing” and last week Deutsche Bank were the party pooper “calling time” on the London property “party.”

According to a new UBS report, England’s capital is home to the most significantly overvalued housing market of any major city in the world – and that means there’s a risk the bubble is close to bursting.

“When inexpensive financing is combined with bullish expectations, real estate prices eventually uncouple from the real economy,” said UBS head of global real estate Claudio Saputelli.

“We have seen this in the current cycle, particularly in the world’s leading financial centers, where housing prices are now, in many cases, fundamentally unjustified. The risk of a real estate bubble in these cities has risen sharply. While it is not always possible to prove conclusively the existence of a bubble, it remains essential to identify the signs of one early on.”

Deutsche bank’s research – as seen in the latest edition of its Konzept magazine – last week warned that:

“The dinner-party perception that prices for prime London property have always gone up is potentially a reason to worry. That everyone strongly believes they will continue to go up further is a cause for anxiety. Still, timing any turn is hard and it has long been a losing battle to call an end to the froth in this market. But perhaps we are close to the turning point.”

Read more on the GoldCore.com blog.

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DAILY PRICES
Today’s Gold Prices: USD 1159.00, EUR 1057.38 and GBP 759.28 per ounce.
Yesterday’s Gold Prices: USD 1171.50, EUR 1058.98 and GBP 765.94 per ounce.
(LBMA AM)

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