Meanwhile, previous top performers such as Turkey and Australia were seeing a slowdown in the pace of price growth while Asian markets were “struggling to find traction”.
Kate Everett-Allen, who heads international residential research at Knight Frank, added, “Economic headwinds still persist in the eurozone. Twelve of the bottom 20 rankings are occupied by European countries and of these, nine are members of the eurozone.”
The report identified Sweden “as one of the index’s few engines of growth”. It said, “Some Nordic countries, together with some Baltic states, stand out as rare hotspots. At 12.8 per cent, annual price growth in Sweden is not far behind Turkey and prices stand 48 per cent above their low in the first quarter of 2009.
“Heading east, Asian markets are stumbling. Singapore, Hong Kong and Taiwan have all seen prices decline by between 3-6 per cent in the year to March 2016. A combination of sluggish economic growth, regulatory measures and new supply are restraining price growth.”
The index, which tracks house prices across 55 housing markets, placed Turkey at the top of its rankings for price growth although the annualised rate had declined from 18 to 15 per cent from the last quarter of 2015.
“Security concerns, Russian sanctions and mounting pressures on the (Turkish) lira are curtailing investment despite high demand and low supply characterising the wider property market,” said the report.