Picture this: you’re finally ready to buy your dream home, you’ve saved the deposit, rates feel manageable again, and then someone whispers the word “bubble.” Suddenly everything feels fragile. In 2025 that uneasy feeling isn’t just in one country – it’s global, and some cities are flashing brighter warning lights than others.
I’ve been watching property cycles for years, and right now the contrast between cities is striking. While most markets have calmed down after the pandemic frenzy, a handful keep pushing higher, almost daring gravity to do its thing. A major Swiss bank’s latest research just mapped the danger zones, and the results might surprise you.
The 2025 Global Bubble Risk Landscape
Every year, analysts crunch numbers most of us never think about – price-to-income ratios that make you wince, rent yields that barely cover coffee, construction pipelines, mortgage growth, the works. They boil it all down into one score that tells you whether a city’s housing market is fairly valued, stretched, or sitting in genuine bubble risk territory.
The threshold everyone watches? Anything above 1.5 signals serious bubble risk. Cross that line and history shows corrections tend to follow – sometimes gently, sometimes not so much.
The Three Cities Currently in the Danger Zone
As of 2025, only three cities sit above that critical 1.5 mark. And no, New York and London didn’t make the list this time.
Taking the unwanted crown is Miami with a score of 1.73. Yes, the same Miami that became the poster child for pandemic-era price madness. Prices there are still climbing – nearly 2% in real terms over the past year – fueled by domestic buyers seeking tax advantages and international money looking for a safe-ish haven.
Right behind is Tokyo at 1.59. This one caught many observers off guard. Japan’s capital has been in a multi-year upswing driven by ultra-low interest rates, foreign investment, and a weak yen making property look cheap to overseas buyers. Real prices jumped almost 6% in the last twelve months alone.
Completing the top three is Zurich at 1.55. Swiss stability meets limited land and high demand from global wealth flowing into one of Europe’s safest harbors. Prices rose 5% in real terms – impressive for a market that rarely moves fast.
The Overvalued Pack Breathing Down Their Necks
Drop below 1.5 but stay above 1.0 and you’re in overvalued territory – not screaming bubble yet, but definitely expensive. Several familiar names live here.
Los Angeles, Dubai, and Amsterdam all clock in around the 1.1 mark. Dubai stands out with double-digit price growth again, riding a wave of new supply that somehow hasn’t dented enthusiasm yet. Madrid surprised everyone by posting the strongest annual gain in the entire index – over 13% in real terms – pushing it deep into overvalued status.
When a desert city sees prices rise 50% in five years while building towers like it’s going out of style, you have to wonder how long the party lasts.
Fair point. The same report flags that Dubai’s supply pipeline for 2026 is massive. Enjoy the ride while it lasts, I guess.
Where the Air Is Coming Out Fastest
Not every story is about rising risk. Some of the biggest markets have seen their bubble scores collapse over the past year.
Toronto dropped dramatically after years near the top of these lists. Real prices fell 7.5% and the city now sits comfortably outside bubble territory. Hong Kong experienced an even sharper price decline – nearly 8% in real terms – pushing it all the way into fairly-valued territory for the first time in ages.
Vancouver, Frankfurt, London, and San Francisco all saw prices move lower too. Higher rates finally bit, affordability constraints kicked in, and buyers simply walked away in some segments.
In my view, these corrections feel healthy rather than catastrophic so far. Prices needed to realign with incomes in many of these places.
What the Full 2025 Ranking Actually Looks Like
Here’s the complete list so you can see exactly where your city – or your investment – sits:
| Rank | City | Bubble Score | Real Price Change (YoY) |
| 1 | Miami | 1.73 | +1.9% |
| 2 | Tokyo | 1.59 | +5.7% |
| 3 | Zurich | 1.55 | +5.0% |
| 4 | Los Angeles | 1.11 | +0.9% |
| 5 | Dubai | 1.09 | +11.1% |
| 6 | Amsterdam | 1.06 | +1.2% |
| 7 | Geneva | 1.05 | +4.1% |
| 8 | Toronto | 0.80 | -7.5% |
| 9 | Sydney | 0.80 | +0.8% |
| 10 | Madrid | 0.77 | +13.6% |
| 11 | Frankfurt | 0.76 | -1.2% |
| 12 | Vancouver | 0.76 | -5.9% |
| 13 | Munich | 0.64 | +1.4% |
| 14 | Singapore | 0.55 | +2.6% |
| 15 | Hong Kong | 0.44 | -7.9% |
| 16 | London | 0.34 | -2.1% |
| 17 | San Francisco | 0.28 | -2.6% |
| 18 | New York | 0.26 | -1.5% |
| 19 | Paris | 0.25 | +0.1% |
| 20 | Milan | 0.01 | -2.7% |
| 21 | São Paulo | -0.10 | 0.0% |
Looking at that table, the divergence is wild. Madrid and Dubai racing upward while Toronto and Hong Kong deflate – all happening at the same time on the same planet.
Why Miami Worries Me Most Right Now
I’ve followed Florida’s market closely, and Miami feels different this cycle. The influx isn’t just retirees anymore – it’s hedge funds buying entire condo buildings, Latin American money parking cash, tech workers relocating. When everyone agrees a place is “the next big thing,” that’s usually when I get nervous.
Add rising insurance costs after recent hurricanes, and the math starts looking shaky for many recent buyers. A 1.73 bubble score doesn’t mean collapse tomorrow, but it does mean very little margin for error.
Tokyo: The Silent Bubble That Could Shock Everyone
Tokyo flies under most radars because Japan spent decades in property purgatory after 1990. People assume it “can’t happen again.” Yet here we are with prices rising faster than almost anywhere else while the central bank keeps rates near zero.
The weak yen acts like a For Sale sign to the entire world. When – not if – the Bank of Japan finally normalizes policy, the currency effect reverses and foreign buyers disappear overnight. That scenario keeps me up at night more than Miami’s.
The Cities That Might Actually Be Reasonable Now
On the flip side, places like Hong Kong and Toronto have corrected enough that they start looking interesting again from a pure valuation standpoint. Prices have fallen, rents/story continues
Of course, “reasonable” doesn’t mean “bargain” – these are still expensive cities. But the froth is gone, and that’s something.
What This Means for Regular Buyers and Investors
If you’re looking to buy a home to live in, bubble scores matter less than whether you can comfortably afford the payments and plan to stay long-term. Markets can stay overvalued for years (ask anyone who waited for San Francisco to crash in 2015).
For investors though, these rankings are pure gold. When a city crosses into high bubble territory with prices still rising, that’s often your cue to take profits or at least tighten stops. When scores plummet and prices follow, the patient buyer sometimes gets opportunities.
I’ve learned the hard way that timing the exact top or bottom is impossible. But recognizing when the music might be getting louder – or suddenly going quiet – that’s doable.
The Bottom Line for 2025
The global housing story isn’t one story anymore. It’s twenty different stories happening simultaneously. Some cities feel like 2021 never ended, others look like the party packed up and left town.
My take? We’re in the late innings for several of these high-flyers. Not tomorrow, maybe not this year, but the margin of safety has shrunk dramatically in the top-ranked cities. Meanwhile, the markets that scared everyone a couple years ago might actually offer some breathing room now.
Either way, 2025 feels like one of those years where where you buy matters more than whether you buy. Choose carefully.
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