"Major urban housing markets in developed economies are still overvalued, and more are at risk of a bubble than in 2016," UBS said in a statement.
After Toronto, Stockholm, Munich, Vancouver, Sydney, London and Hong Kong round out the top six, according to the banking giant's latest Global Real Estate Bubble Index.
Of the 20 cities studied, the only European urban centre where housing prices were not inflated was Milan, the report further said.
It noted also that while London's real estate market remains overvalued, the risk of a bubble has declined since the Brexit vote of 2016.
Paris, one of several European cities that saw "sharp increases" over the last four quarters, "has regained nearly all the ground it lost since 2012", UBS said.
The report found only one city, Chicago, where real estate prices were undervalued.
"Improving economic sentiment, partly accompanied by robust income growth in the key cities, has conspired with excessively low borrowing rates to spur vigorous demand for urban housing", UBS global real estate chief Claudio Saputelli said in a statement.
The report noted that the housing market in leading cities continues to be spurred by demand from China, which has in some case "crowded out local buyers".
Zurich and Frankfurt were also among the top 20 cities where property is overvalued vis-a-vis wages. Milan represents the best value city in Europe, according to the study: "You need to work only 5.7 years to afford a 60 metres squared flat."
Overall, the house of prices in many world cities is too expensive for most buyers. "Buying a 60m2 (650 sqft) apartment exceeds the budget of people who earn the average annual income in the highly skilled service sector in most world cities," states the report.