For the first time, Toronto has made it onto an international real estate investment index prepared by a Swiss firm, but for the wrong reasons.
In an annual Global Real Estate Bubble Index by the UBS Group, Toronto has been introduced to global investors with a bang.
The city comes in as a new entry at the top of the list, as the most overvalued city in the world and the most at risk of a housing bubble, according to UBS.
This is a firm that provides investment advice to wealthy and corporate clients.
The index is based partly on housing price increases compared to income, which UBS says is not currently sustainable. The firm points out that while real prices have doubled in 13 years, income has increased by less than 10 per cent.
Vancouver comes in fourth on the list, after sitting on top in 2016.
UBS says that neither Canadian city was dragged down by either the financial crisis last decade, or weakening commodity prices, while most U.S. cities have yet to return to their 2008 peak in real terms.
NEWSTALK 1010 real estate host Todd C. Slater says this index is more of a warning for big investors, than your average local buyer.
"This is not warning bells for your standard family or even the smaller investor," Slater says. "From a speculative standpoint, they're saying Toronto has probably run its course... this may deter some of the large corporations to come in and speculate in real estate."
He says it would take some catastrophic event in the market for the bottom to drop out of prices.
Slater adds that at least Toronto is now included on the list and brought to the attention of investors.