A study of prime property prices around the world shows they surged by an average rate of 11 per cent last year, with some individual cities posting much faster growth rates, although the pace may slacken this year, according to a recently published report.

The 2008 annual wealth report byCiti Private Bank andKnight Frank, the property firm, said the average price of prime properties in London set the fastest growth rate of 35 cities and regions it tracked.

Prices in London’s most desirable areas shot up by 29 per cent with values reaching €46,000 ($71,464) per square metre, putting it ahead of the tiny principality of Monaco, at €43,750 per square metre, St Jean Cap Ferrat, France, at €43,490 per square metre, and Courchevel, in the French Alps, at €35,000.

At the bottom end of the league table, meanwhile, is Dublin, where prime properties’ average price is €6,300 per square metre.

Much of the strongest growth rates, the report said, came in financial centres and low-tax jurisdictions, which have attracted high net worth individuals. “Five of the top 10 growth locations in 2007 were in this group,” the report noted.

Even though the credit crisis blew up last summer, London’s prices for the most desirable locations, for example, had not felt the knock-on impact by the start of this year, according to the report. For example, the number of home sales of £10 million or more in Chelsea, Knightsbridge and Belgravia skyrocketed by 190 per cent in the six months to January 2008 compared with the same period a year before.

However, the report cautioned: “Since September [2007], the prime and mainstream markets have slowed and activity and price growth should slow further into 2008, but at the top end of the market there has been no such slowdown.”

One reason why the most expensive London properties have not weakened in price is due to the strong levels of wealth creation driven by the world’s red hot commodity and energy markets.

Elsewhere, the report said that with the exception of London, Switzerland and Monaco, other European locations produced price growth well under the global average and in the case of Dublin, they fell by 15 per cent in 2007 from a year before, for example.

In Africa, some price trends were strong: prices in Marrakech, Morocco, grew by 12 per cent, and by 25 per cent in Botswana. In Australia, prices rose by about 9 per cent in prime Sydney and prime Gold Coast locations.”

However, the picture is more sombre in the US, where prime markets eked out growth of 2 per cent last year from a year before. In the Caribbean, some individual markets were strong, not least Antigua, with growth of more than 40 per cent, the report added.