Miami has the highest real estate bubble risk in the world, according to a new report from a major world bank.

Union Bank of Switzerland (UBS) released its Global Real Estate Bubble Index and Miami the most overvalued real estate market among 20 major cities worldwide.

UBS warns that Miami's market is so overvalued it's about to crash, but it won't be sudden, according to the report.

'Miami's coastal appeal and favorable tax environment continue to attract newcomers from the US West and Northeast, with real estate prices still well below those in New York and Los Angeles.'

The UBS considers the following factors in determining the Bubble index: price-to-income and price-to-rent ratios, lending standards, construction activity, and real price growth.

Currently, Miami’s price-to-rent ratio is more detached from reality than the extremes of the 2006 U.S. housing bubble.

According to the report, 'Recently, housing inventory has rebounded to near pre-pandemic levels, as slightly lower mortgage rates and significant levels of embedded equity have prompted some homeowners to list their properties. Additionally, regulatory changes have forced many long-time owners of older condos to address decades of deferred maintenance, resulting in substantial costs. Together with higher insurance premiums driven by increased environmental risks, this has further contributed to selling pressure.'