The gap in annual price growth between the best and worst performing luxury residential markets was 45% in 2011, according to the results of the Knight Frank Prime International Residential Index (PIRI).
The majority of locations covered in the survey saw flat or falling prices and, ironically, some of the largest price drops were in areas with the strongest economic growth.
Emerging markets influenced performance far and wide, with wealth flows to the developed world's property hotspots driving growth in Miami, London and Vancouver. Meanwhile, price falls in some of Europe's luxury markets point to the ongoing impact of the global financial crisis; similar falls in Singapore, Sydney and Shanghai confirm the unravelling of price booms in Asia.
As wealth creation and luxury property markets become ever more global, so the issues of exchange rate volatility, political risk and security concerns rise in importance for HNWIs, competing with more prosaic motives such as investment and lifestyle. This has led to the concept of the safe haven location.
Of all the luxury market trends that have played out since the launch of Knight Frank's Wealth Report five years ago, it is the growth of global wealth flows that has done most to shape the leading prime markets.
When asked which nationalities will become most important as prime property buyers over the next five years, Chinese, Russian, Middle Eastern, Latin American and those from other growth economies consistently top advisors' lists.
Nairobi tops the index with annual price growth of 25% followed by the Kenyan cost, up 20%. Miami is close behind on 19.1% followed by Bali at 15%, Jakarta at 14.3% and London at 12.1% then Vancouver at 10.4%. Among the biggest losers in the price stakes are Mumbai, down 18.1%, Monaco, Mallorca and the Dordogne in France, all down 10%, and Sydney down 8%.
Wealthy buyers rate personal security and safety as the top consideration when it comes to buying a property with 63% citing this reason first. That is followed by 60% seeking economic openess and 51% wanting social stability. Other influencing factors include excellent education systems, easy access to other cities, healthcare and transport facilities. T
he United States is the most popular location for wealthy buyers followed by the UK and then France, Spain and Singapore.