A new report has ranked Chinese city of Shenzhen as leading the global residential house price index with price growth of 47.5 per cent in 2015.   The index by international real estate firm Knight Frank  covers 165 of the world’s key urban residential markets, which increased by 4.4per cent in 2015.

More than 121 of the 165 cities tracked by the new index, based on official house price data, compiled , saw house prices either rise or remain flat in 2015.

Shenzhen property prices increased by 47.5per cent and more than 22per cent separates it from the index’s second ranking city of Auckland in New Zealand were prices increased by 25.4per cent last year.

In 2015 China saw the largest disparity amongst its cities with 50per cent separating its strongest and weakest performing city housing market. The report points out that first tier cities in China saw strong demand on the back of the relaxation of policy restrictions which boosted market performance.

Shenzhen is fast becoming one of China’s key technology hubs, its population of 10 million has an average age of 30.

Budapest, where prices increased by 16.3per cent in 2015, is the strongest performing capital city within the index. The city’s comparative value, combined with an exclusive investment immigration bond programme for Chinese nationals, has fuelled demand, according to Kate Everett-Allen head of international residential research.

Of the 20 US cities included in the index the strongest growth was in Portland with prices up 11.4per cent and San Francisco up 10.4per cent. Washington DC the weakest with price growth of 1.7 .

Although none of the US cities saw prices decline, no single city could compete with Vancouver, which proved North America’s top performer, with prices rising 11.9per cent on an annual basis.

The Indian city of Chandigarh was at the bottom of the index with prices down by 7.7per cent year on year. Despite cutting interest rates four times in 2015, India’s base rate still stands at 6.75 and the economy has faltered impacting on household income.

Of the 43 cities, which saw house prices decline in 2015 some 20 were located in Europe, with the southern European economies struggling in particular. Cities in Greece, Italy and Cyprus occupy four of the bottom five rankings.

The report also points out that urban and rural housing markets are increasingly polarised when it comes to price performance. ‘According to the World Bank, 54per cent of the world’s population currently lives in cities, and by 2045 the urban population will rise by another two billion to six billion, suggesting the pressure on urban prices looks set to intensify,’ added Everett-Allen.