The real estate market in Tel Aviv is expected to cool off, but home prices are still high, according to a report by UBS Global Wealth Management published before Rosh Hashanah, which for the first time included the city on its list of global real estate bubbles.

The Swiss bank’s “Global Real Estate Bubble Index 2019” measures housing prices in 24 large cities worldwide. For the first time, this year’s index included Madrid, Moscow and Tel Aviv, listed as cities with high housing prices, as well as Dubai, where prices are listed as “balanced.”

According to UBS, among the cities covered by the index, Tel Aviv has seen the largest housing price increases in the past 30 years.

The report found that home prices in Tel Aviv rose almost consistently from 2003-17, which caused the market to enter a “bubble price range.”

However, the report said, the growing difficulty of purchasing an apartment and the rise in mortgage prices led to an actual price drop of almost 10 percent.

“The party is over,” the UBS report declared, explaining that housing prices in Tel Aviv were “approaching normal.”

Middle-class and upper-class Israelis need to work for 11 years to be able to afford a 650-square-foot apartment in central Tel Aviv, which is similar to the years required to buy a home in Tokyo or New York, but less than in Hong Kong and more than are needed to buy a home in Munich, Moscow, Frankfurt or plenty of other major cities.

Tel Aviv is ranked 13th on the list of the world’s “bubble cities”—cities where housing prices are outrageous and have the most chance of seeing their real estate bubbles burst.

This article first appeared in Israel Hayom.

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