Housing prices in Hong Kong are the most overvalued and at the greatest risk of collapse, according to a report focused on 20 major cities. UBS Group's Global Real Estate Bubble Index puts Munich, Toronto, Vancouver, London and Amsterdam alongside Hong Kong as cities currently in property bubble territory. "Major imbalances" are also found in Stockholm, Paris, San Francisco, Frankfurt and Sydney, the report said.

Los Angeles, Zurich, Tokyo, Geneva and New York are merely deemed overvalued, while Chicago is the only city included in the list that is viewed as undervalued. The UBS researchers found a widespread breadth of the rise in property prices in major cities with prices increasing 35 percent on average over the last five years. They identified price bubbles as regularly recurring phenomenon in property, defining them as "a substantial and sustained mispricing of an asset." The report said typical signs include a decoupling of prices from local incomes and rents, as well as excessive construction or bank lending. "Although many financial centers remain at risk of a housing bubble, we should not compare today's situation with pre-crisis conditions," Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a statement.

Hong Kong is identified as the most extreme city in bubble territory. It has seen house prices rise at an annual rate of almost 10 percent since 2012. Current property cooling measures have failed to rein in prices in the former British colony and there has been some suggestion that tighter restrictions could be coming for non-local homebuyers. Both Toronto and Vancouver are considered by UBS to be in bubble territory. The bank noted that higher stamp duties on foreign buyers have done little to curb the boom in prices in Vancouver but do look to have checked real estate appetite in Toronto.

For U.S cities, the UBS bubble risk scores sit below 2006 peak values. Boston and Chicago valuations remained low in fair-valued and undervalued territory respectively, while New York, Los Angeles and San Francisco all fell within the overvalued segment. The score for New York dropped following static sale prices over the last year.