People are paying more for homes around the world, with average house prices up 6.5% across 55 countries, according to the Global House Price Index from Knight Frank.
Price growth reached double digits for 11 countries in the year leading up to 2017; only four saw that kind of growth in 2016. In addition, 48 countries recorded rising home prices in 2017, as opposed to 43 in 2016, the index said.
One reason for the increase in prices across the globe, according to Knight Frank, is general economic growth. The International Monetary Fund forecasts global GDP to rise by 3.5% in 2017 up from 3.1% in 2016. The report also cited a greater availability of mortgage financing in developing markets as a growth factor, as well as the reputation of property as a safe investment.
Iceland is at the top of the Index with an average price growth of 17.8%.
In that country, a “dearth of new supply is behind the accelerating prices,” Kate Everett-Allen, a partner on the International Residential Research team at Knight Frank, said in a statement. “Iceland’s Housing Financing Fund suggests 9,000 new apartments need to be delivered over the next three years in Reykjavik alone to keep pace with demand.”
Hong Kong and New Zealand took second and third places on the Index, with prices rising 14.4% and 13.8% respectively. Canada was fourth on the list, with prices rising 13.5%. The U.S. saw much more modest growth, 5.8%, for a 29th-place ranking.
China is now 10th on the list, down from seventh place in the annual ranking, although the quarterly fall was marginal, from 10.8% to 10.3%.
Despite various property market cooling measures, including home purchase restrictions and increased down-payment ratios, residential prices in China continued to rise.
Topping the list from Europe are Malta (12.6%), Czech Republic (11%), Estonia (10.7%) and Hungary (10.5%).
The Global House Price Index was established in 2006. The quarterly report uses official government statistics or central bank data where available.