Australia has jumped to 20th place in Knight Frank’s latest Global House Price Index (1Q 2017), boosted by strong growth in the Sydney and Melbourne property markets.

The 7.7% annual growth seen in the three months to March was more than double the 3.5% increase in the December quarter, when the country ranked 37th out of the 55 countries included in the list.

“The momentum in house price growth picked up in late 2016 for Sydney and Melbourne, and this flowed through to dominate the uptick in the national result,” said Michelle Ciesielski, director of residential research at Knight Frank Australia.

Australia last posted double-digit growth a year ago in the December quarter of 2015, when a 10.7% annual growth rate put the country in fourth ranking overall. Since then, however, measures such as APRA’s new limits on interest-only mortgage lending, which it implemented at the end of March, have begun to slow down the market. Rising additional costs for foreign buyers of Aussie property also contributed to the market slowdown, according to Ciesielski.

“The ability to source lending finance has tightened for both local and foreign investors; mortgage interest rates have increased despite the official cash rate falling 50 basis points to currently stand at 1.50 per cent. We also saw application fees for foreign buyers being introduced and state-based surcharges on stamp duty were increased in Victoria, and rolled out in NSW and Queensland,” she said.