Well the Knight Frank Prime Cities Index claims to be a definitive global guide. The only South African city to feature is Cape Town which appears at about halfwaydown on the property price change list.

Prime property corresponds to the top 5% of the mainstream housing market in each city. Knight Frank examined the value of prime property in key global cities and reports a 0.2% rise in the final quarter of 2011. However the index saw 3% growth for the year over all. Alas the unpleasant drop in the second half of the year was the second time since the 2008/9 global financial crisis.

Despite European woes, since late 2010 it has been the Asian cities which have slowed price inflation. In Q2 2010 prices in Asian cities were rising at an average rate of 23.6% each year, the comparable figure now stands at -1%. The worst hit being Mumbai where prime property dropping by -18%. (Singapore losing -7% and Kuala Lumpur at -6%.)

But a more cautionary climate prevails. Possibly due to anti-inflationary price cooling measures implemented by Asian governments, combine this with jitters about the European sovereign debt crisis.

Looking at five primary world regions year on year: Africa has grown by 13.7% - that’s Nairobi at a whopping 25% and Cape Town at 2.4%; then North America has seen growth of 8.3%, top performers being Miami at 19.1%, Manhattan 3.1% and Los Angeles at 2.5%; The Middle East did not fare as well at 2.5% overall and Europe sitting at 1.6% not reflective of some of the better performing cities like London 12.1%, Moscow 9.8%, Kiev 7.5%, St Petersburg 4% and Zurich at 3%. Europe’s overall figure is dragged down by some notable underperformers like Paris -3%, Madrid -5.5%, Geneva -5% and a staggering -10% for Monaco.

An interesting cameo performance has Nairobi, Miami and Jakarta displaying the most impressive growth in Q3 of 2011. Strong economic growth in Kenya’s Nairobi and Jakarta in Indonesia while Knight Franks reports foreign demand from Brazil and other Latin countries seemed to push up prices in Miami. Knight says nothing about Cape Town except placing it squarely in the middle at 2.4% growth, which one may argue is pretty impressive given the circumstances.

The strongest message coming through the figures seems to be that so called ‘old-world’ cities, as Kate Everett-Allen  from International Residential Research puts it, such as London, New York and Moscow are outperforming the overall index. With the exception of Paris,London and Moscow have ranked highly for several quarters and Manhattan’s recovery is picking up speed. Overseas exigency for New York’s luxury apartments is not only growing, but is also starting to diversify with Chinese nationals increasingly evident, particularly in the $1-$3m range.

Although the luxury end of the market has suffered some sluggishness heading into the second half of 2011, the world’s prime markets continue to outperform their mainstream housing markets, making a salient point for investing in what has come to be accepted as safe-havens. Despite the European debt crisis and its consequences on markets and property, cities like London, Moscow and even St Petersburg and Ukraine’s Kiev are attracting capital away from the east. This in the midst of the on-going events stemming from the Arab Spring in the middle East and North Africa.

Residential Research believes that it’s most likely that prime property will continue to be a safe-haven in 2012. International Business Times’ (IBT) examination of the Knight Frank reports, predicts prices falling in 44% of the cities monitored during 2012, with a similar amount likely to experience price rises. Values are expected to remain unchanged in 12% of the cities.

IBT also comments that the slowdown in prime price performance is increasingly visible in the Far East, with 60% of cities anticipated to see a drop in worth. Growth has been curtailed by government fiscal policy measures designed to reduce the risk of spiralling inflation and over-heating in property markets. Although, in Hong Kong and Shanghai prime residential real estate has increased in value by 7.8% and 3.8% respectively over the past 12 months, that’s down from 19.7% and 29.7% a year earlier.

Knight Frank predicts that growth in the price index will continue in an upward trend as it is underwritten by a flight of capital from less stable regions about the globe. In conjunction with this is the drive among wealthy investors to focus on property and other real assets as opposed to financial products.