ZURICH, Sept 27 — Hong Kong has the most overvalued housing market while Chicago offers bargains, a study by Swiss bank UBS has found, suggesting real estate prices in most big cities remain too high, even though they’ve slipped lately.

Munich, Toronto, Vancouver, Amsterdam and London also face risks of a housing bubble, but Stockholm and Sydney moved out of bubble territory this year and Geneva moved closer to fair value.

Chicago was once again the only undervalued city in the UBS Global Real Estate Bubble Index 2018 report, which analyses residential property prices in 20 developed-market financial centres around the world.

Valuations were stretched in Los Angeles, Zurich, Tokyo, Geneva and New York, it said. Boston, Singapore and Milan seemed fairly valued.

Unlike the property boom of the mid-2000s, UBS found no global evidence of simultaneous excesses in lending and construction. Outstanding mortgage volumes were growing half as fast as they did before the financial crisis.

"Although many financial centres remain at risk of a housing bubble, we should not compare today’s situation with pre-crisis conditions,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

"Nevertheless, investors should remain selective within housing markets in bubble risk territory such as Hong Kong, Toronto, and London.”

The house price boom in key cities lost intensity and scope over the past year, the report said. Inflation-adjusted city prices rose 3.5 per cent on average over the last four quarters, considerably less than in previous years but still above the 10-year average.

They remained on an "explosive uptrend” in the largest eurozone economic centres, Hong Kong and Vancouver.

"But the first cracks in the boom’s foundation have begun appearing: House prices declined in half of last year’s bubble risk cities — in London, Stockholm and Sydney by more than 5 per cent in real terms.” — Reuters