Despite falling house prices, joint research by Citi Private Bank and property consultancy Knight Frank has found that over half of high net worth individuals are planning to increase their investment in the asset class.

The Knight Frank/Citi Private Bank Attitudes Survey revealed that almost 55 per cent of those surveyed plan to increase their exposure to property over the next two years - in spite of the declines in property prices seen at the end of last year as the world's wealthy cut their discretionary spending. 

The Knight Frank Prime International Residential Index (PIRI) found that just under 50 per cent of its 55 featured locations showed positive price growth on an annual basis in 2008. However, by the final quarter of last year, price growth had either stalled or fallen in 75 per cent of locations.

Research also revealed wide variations in residential property price performance last year: Hong Kong saw the sharpest annual drop in prices - 24.5 percent – but at the same time Bangkok rose 22.5 per cent.

Moreover, some previously buoyant markets soured rapidly in 2008. In Dubai, which showed an annual overall growth of just under 11 per cent, prices fell by 19 per cent in the final quarter alone.

Despite this mixed performance, residential property is still finding favour with investors. “In turbulent times the wealthy want their investments to be both tangible and transparent,” said Liam Bailey, head of residential research at Knight Frank.

In other findings, according to PIRI figures, prime property in Monaco is the most expensive in the world, at €55,000 (around $75,000) per square metre, with London and Manhattan coming second and third in the rankings.

The 2009 “Wealth Report” carried out by Knight Frank and Citi Private Bank also concludes that London and New York are likely to remain pre-eminent as financial centres, despite the mounting challenge from Asian locations.

Participants in the Knight Frank World Cities Survey were asked to rate the global influence in 40 of the world’s financial centres in terms of four key ranking criteria: "economic activity", "knowledge and influence", "political power", and "quality of life". London, which secured top-five positions across these criteria, emerged in poll position overall.

The Knight Frank/Citi Private Bank Attitudes Survey is an online survey completed by a global cross-section of Citi Private Bank’s wealth managers representing around 2000 of the world’s wealthiest people.