In Singapore the new 10 per cent stamp duty for foreign buyers, which was introduced in December 2011, dented demand but not prices, which rose 1.9 per cent, according to Nicholas Holt, Knight Frank’s Asia-Pacific Research Director.

Holt said: “Prices not only held up but actually increased slightly at the very top end of the Singapore market in Q1 2012. This was not only due to fairly resilient domestic demand, but also due to wealthy Chinese, Indonesian and Indian buyers who continued to buy in this segment of the market undeterred by the surtax.”

A similar story was seen in London in the first quarter of 2012. In the UK capital both prices and applicant numbers increased despite the stamp duty rise to 7 per cent for individuals buying homes over £2 million ($3.2 million), according to Knight Frank data.

Although strong performance was seen in traditional safe havens like London, Singapore and North America, there was also demand for property bargains in undervalued areas. Nairobi prime property soared 24 per cent in the last 12 months to March 2012, and Jakarta also achieved double digit growth, according to the London-headquartered agent in its quarterly index if key global cities.

Prices in Dubai (up 4 per cent) rose the most in the last 3 months

Sluggish global performance

But overall, prices of prime property in the last quarter fell slightly by 0.4 per cent, representing the index's first quarterly fall since the depths of the global recession. Overall, the index rose 1.4 per cent in the 12 months to March 2012.

Although a milestone, the index’s negative quarterly growth is not surprising, said the agent. Quarterly price growth has been below 2 per cent since Q1 2010 and it averaged only 0.6 per cent in 2011.

The first three months of 2012 brought with it little new momentum. The Eurozone’s debt debacle remained at the forefront of the global economic agenda, several critical elections were on the horizon (Russia, France, Greece) and Asia’s highly-effective cooling measures showed no sign of being relaxed. Against this backdrop some luxury buyers took to the side-lines to observe their market’s trajectory.

"In our view the overall index will remain subdued in 2012, fluctuating between marginal price falls and rises (with London, Moscow, Jakarta, Nairobi and Singapore expected to be the strongest performers) but it seems unlikely we are on the cusp of a new deflationary cycle in luxury global house prices," said the agent.

"The safe-haven argument still resonates," said Knight Frank in the report. "Capital flight will continue to focus on cities with low political risk, transparent legal systems, good security and ideally those with an HNWI-friendly tax regime."