In many of the world’s fastest growing economies there is a strong process of urbanization, with strong growth in households’ disposable income and an increasing demand for new homes. This has led to rising real estate prices and increasing production volumes. Considering the real estate sectors strong influence on the economy, this development is a powerful engine in overall economic growth. But this development also poses a threat if it leads to a so-called bubble formation, i.e. a price increase that is not supported by the underlying assets fundamental value. From a financial perspective, a bubble formation, especially if it takes place in one of the major international housing markets, would pose a significant risk to both the national and the global economy. The aim of this project is to develop a Bubble Index for each residential area in Greece.