Vancouver in Canada has been identified by Swiss bank UBS as the global financial center with the riskiest housing bubble.
The Global Real Estate Bubble Index, released on Tuesday by UBS, looks at the state of the property markets in selected cities around the world and ranks them according to the risk of "bubble" status.
It found that house prices within its bubble risk zone have increased by almost 50 percent since 2011.
UBS said Vancouver prices were unaffected by the financial crisis in 2008 and continue to rise despite weakening commodity prices.
"Over the last two years, the housing market has gone into overdrive due to strong demand for local properties among foreign investors and a loose monetary policy," the report said.
"Currently, house prices in Vancouver seem clearly out of step with economic fundamentals, and are in bubble risk territory."
Hot on the heels of Vancouver are London and the Swedish capital, Stockholm. The report stated that, with the exception of Milan, low interest rates in the euro zone have pushed all the European cities reviewed into bubble territory.
"The low-interest phase in the growth engines of Europe has contributed to overheating of markets for urban residential properties in recent years," it added.
"As a result, prices in London, Stockholm, Munich and Zurich have reached new record levels after adjustment for inflation."
Central banks ‘playing part’
The report also noted the risk of a real estate bubble in both Paris and Geneva has abated.
Dean Turner, an economist at UBS Wealth Management, told CNBC Tuesday that prices were being driven by optimism and capital inflow, but added that central banks were also playing a part.
"A third impact to focus on is the impact of loose monetary policy globally, especially as we seem to be in a period where that policy appears to be in place for some time," he said.
Turner also explained how the report came to its conclusions.
"In terms of what categorizes itself as a bubble, it is where we see excessive rises on a number of metrics on this index. Not just prices, we are looking at price-to-income, rents-to-prices and ultimately tracing these back to each cities history," he said.
New York bubble?
For New York, the report describes the city as "fairly valued", stating that real house prices in the Big Apple are almost 25 percent lower than they were 10 years ago.
However, New York rents are more than 50 percent higher in real terms than in 2006, making them among the highest worldwide.
And if you are looking for a bargain, then Chicago may be your answer, as UBS reported the city has been outpaced in house price growth by the wider U.S. average and is now considered undervalued by the bank.
Globally, prices may be high but Turner said that shouldn't exclude property as an investable asset.
"In a world of low yielding assets, property does continue to look attractive in some instances," he said.
