The bank’s Global Real Estate Bubble Index placed the London residential market as the most overvalued in the world, driven up largely by foreign demand at a time of geopolitical risk. How useful is the report? Blowing its own trumpet, it claims that between 1985 and 2009, an index of 1.0 or more has resulted in an average correction of 30% within three years 95% of the time. London’s index is currently 1.88, and the report follows similar warnings from Deutsche Bank.
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