By Joyce Teo, Property Correspondent

PRIME home prices in Singapore plunged nearly 15 per cent last year, registering the fifth largest fall in the world, according to the Knight Frank Prime International Residential Index (Piri).

Hong Kong saw the largest decrease in 2008 of 24.5 per cent and was followed by UK Home Counties (-19.4 per cent), London (-16.9 per cent), and Marbella in Spain (-15 per cent).

Overall, Piri painted a gloomy picture for prime home prices around the world.

Although a number of locations did see values rise last year - Bangkok, for instance, had the highest growth of 22.5 per cent - growth had either stalled or fallen in three-quarters of locations, said Knight Frank's head of residential research, Mr Liam Bailey.

'It is now clear that not even the most desirable property around the world will remain immune to the global financial downturn,' he said.

'The fact that some locations did manage to show positive growth - even as much of the world slipped into recession - is more of a reflection that different regions are in different stages of the economic cycle, rather than any inherent ability to ride out the storm unscathed.'

Even markets that have seen spectacular growth have turned south very quickly - prices in Dubai rose by 10.8 per cent overall last year but fell 19 per cent during the fourth quarter as investors pulled out of an over-supplied market.

In prime Asian locations, performance has weakened noticeably in recent months and there is talk of steep price falls this year as wealth creation falters.

'The latest Piri results show that even the world's richest people have reined back their discretionary spending in light of the credit crunch and global recession,' said Mr Bailey.

With prime properties at US$1,550 (S$2,340) per square foot (psf), Singapore was ranked as the ninth most expensive city location in the world last year. It was down from eighth spot a year ago.

Monaco took the top spot at US$6,550 psf, followed by London at US$3,670 psf, and New York (Manhattan) at US$2,160 psf. Tokyo was in sixth position at US$2,080 psf and Hong Kong came a close seventh at US$2,070 psf.

Prices are falling in these locations, even though they remain the top 10 most expensive places. In Monaco, prime homes prices rose 2.1 per cent in the year but fell 10.7 per cent in the fourth quarter from the third.

On the upside, the Wealth Report's attitudes survey shows that the rich remain committed to property. The desire to own good property in the best markets remains an enormous driver for the prime residential sector.

'We believe the quality of the best prime locations will still continue to attract buyers and will recover the quickest,' said Mr Bailey.

This article was first published in The Straits Times.