China continued to have highest growth in housing prices in the world in the first quarter, having seven of top 10 cities with the highest price appreciation, according to Knight Frank’s Global Residential Cities Index released Wednesday.
On average, home prices in 20 Chinese cities tracked by Knight Frank grew 15.9% year-over-year in the first three months, following a 19.2% increase in the last quarter of 2016.
The slower growth rate is largely attributable to tighter government regulations, including higher down payment and limits on second-home purchases, according to the London-based global real estate consultancy.
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Second-tier cities, including Wuxi (31.7%), Nanjing (28.8%) of Jiangsu province, and Zhengzhou (25.4%) of Henan province, which occupied the top three spots in the 150-cities Index, outpaced Beijing and Shanghai this quarter.
Shanghai (19.7%) and Beijing (20.5%), which previously held third and sixth positions, dropped down to 13th and 12th respectively.
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Other findings:
Knight Frank’s 150-cities home price index rose 6.9% in the first quarter, a three-year high 123 cities, or 82% of the total, saw positive annual price growth and 40 of those recorded double-digit increases Toronto ranked the fourth among 150 global cities, with home prices rising 24.8% Dutch cities are emerging as a key center of growth, all four tracked by the index exceeded 10% annual growth Seattle, occupying the 29th spot, is the highest-ranking U.S. city, with home prices increasing 12.2% year-over year
Canada’s Toronto and Hamilton Ranked in Top 10
While Chinese cities dominate the top cities with fastest price growth, the remaining three positions belong to Toronto and Hamilton, both in Canada, and Oslo, Norway, ranking fourth, seventh and 10th, respectively.
Home prices in Toronto rose by 24.8% in the year to March. The city introduced a 15% foreign buyer tax in April, similar to what Vancouver has adopted since August 2016. This "suggests the city may follow Vancouver’s path further down the rankings later this year," said Kate Everett-Allen, head of International Residential Research at Knight Frank.
Vancouver, which ranked 22nd with 17% price growth in the last quarter of 2016, slipped down to 30th in rankings in the first quarter this year, with average home prices increasing 12.2%.
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Oslo (21%) remains Europe’s strongest-performing city for the second consecutive quarter. During the final three months of 2016, home prices there grew 21.7%, earning the city 12th place in the global ranking.
Reykjavik, capital of Iceland, is also hot, as home prices surged 18.3% in the first quarter.
| Home Price Trends in Selective Global Cities | ||||
| City/Country | Ranking Q1/2017 | Y-O-Y Change | Ranking Q4/2016 | Y-O-Y Change |
| Wuxi, CN | 1 | 31.7% | 2 | 35.7% |
| Nanjing, CN | 2 | 28.8% | 1 | 41.1% |
| Toronto, CA | 4 | 24.8% | 13 | 19.8% |
| Halmiton, CA | 7 | 21.5% | 21 | 17.5% |
| Oslo, NO | 10 | 21% | 12 | 21.7% |
| Wellington, NZ | 11 | 20.6% | 10 | 23.7% |
| Beijing, CN | 12 | 20.5% | 6 | 28.1% |
| Shanghai, CN | 13 | 19.7% | 3 | 31.7% |
| Hong Kong, CN | 17 | 18.6% | 87 | 4.2% |
| Reykjavik, IS | 18 | 18.1% | 24 | 14.3% |
| Sydney, AU | 23 | 14.4% | 36 | 10.3% |
| Melbourne, AU | 24 | 13.40% | 33 | 10.80% |
| Auckland, NZ | 25 | 13.40% | 26 | 12.40% |
| Seattle, US | 29 | 12.20% | 34 | 10.80% |
| Vancouver, CA | 30 | 12.20% | 22 | 17.00% |
| Source: Knight Frank | ||||