Urban house prices are rising at their fastest rate since 2007 and, of the 150 cities we track, 43 are now registering annual price growth above 10%.

A combination of powerful forces are driving house price growth; a severe undersupply of housing in many locations has been exacerbated by the slowdown in construction during the pandemic and significant numbers of buyers are locking in ultra-low mortgage rates while they can. Fear of missing out (FOMO) is also driving sales and with borders closed investors are looking closer to home to take advantage of rising prices, writes Kate Everett-Allen.

Governments in New Zealand, Canada, China, South Korea and Ireland have all taken steps to curb price inflation during the first half of this year to differing degrees of success. There are now signs, however, that some markets are cooling as the distortive effects of the pandemic ease. Canada has reported two straight months of moderating sales and Capital Economics reports that mortgage applications for US home purchases have fallen back to pre-Covid levels.