Nothing unites the world’s city dwellers quite like complaining about property prices.
In the past few years, spikes in house prices have passed from one big city to another, starting in San Francisco before passing through London and Sydney. Vancouver and Toronto, most recently, experienced daunting periods of sky-high house-price inflation, with average prices rising at a 30-plus percent annual rate at their peaks.
Last year, UBS warned that Vancouver faced the biggest risk of a real-estate bubble. A weak Canadian dollar, low interest rates, and demand from foreign buyers sent house prices soaring last summer. This year, Toronto experienced a similar spate of manic property purchasing. Both places have tried to bring the situation under control, with some success, by imposing a 15% tax on overseas buyers, among other things.
So which city is next?
If you’re making bets, here are three strong candidates. First up is Auckland, New Zealand, where the IMF warns that a booming housing market is storing up trouble, while Goldman Sachs says there’s a 40% chance of a housing “bust” over the next two years. Next, there’s Seattle, where house prices are rising at the fastest pace in 11 years, and more than double the speed of the US overall. And finally, consider Stockholm, where the central bank has been agonizing for ages about rising house prices and daunting mortgage debts.