Real Estate

House hunting? This is 2016’s most pricey country

This is 2016's priciest country

House prices in most countries looks set to keep rising this year, Fitch ratings agency said in a new report on Wednesday, as low mortgage rates and improving employment support growth.

Those looking to buy down under will need to dig particularly deep.

Fitch says Australia and New Zealand will remain expensive as low interest rates mean prices are set to remain elevated.

On a price to income basis Fitch identifies New Zealand asthe most expensive country to buy property.

John Greim | LightRocket | Getty Images

The agency expects to see average price growth of 4 to 5 percent in the United States, adding that U.S. house prices remain 20 percent below peak levels.

With most markets set to enjoy price growth, affordability for many will remain a challenge.

Home ownership is at a 25-year low in the U.S. and is falling in many major mortgage markets says Fitch.

Although some regulators are attempting to address this by targeting investment properties such as buy-to-let, the agency says these efforts will struggle to contain the effect of continuing low interest rates.

To the north, Fitch continues to view Canadian home prices as overvalued but still expects growth this year between 2 and 2.5 percent.

Every country listed with an improved outlook on Fitch's list is located in Europe.

The U.K. is forecast to rise between 4 and 5 percent, driven in the main by a housing supply shortage.

However, Fitch says probable interest rate rises from the Bank of England and stretched affordability will put a cap on any big gains.

Meanwhile peripheral euro zone markets will continue to rebound, but Italy and Greece won't be among the gainers.

Italian house prices are predicted to bottom out during this year while Greek prices are forecast to keep falling for another two years.

France is forecast to record an average 2 percent fall in house prices across 2016.

Property regions on the slide

Brazil, South Africa and Singapore are the only three countries whose outlook was downgraded by the agency.

A supply glut is to blame for a predicted price drop in Singapore while Brazilian and South African property prices will drop in line with a weakening economic picture.