London homes no longer world's priciest

LONDON is no longer the most expensive place to buy a home.

The capital has seen one of the biggest falls in value of any part of the world and property is now priced at £26,300 a square metre. It was knocked off its top spot by Monaco where residential space is almost twice as expensive at £47,000 per square metre.

But London still beats Manhattan at £15,500 a square metre. The annual Wealth Report, compiled by Citi Private Bank and estate agents Knight Frank, found the capital's prices were down 17 per cent, a slump beaten only by Hong Kong where homes are 25 per cent lower.

Liam Bailey, head of residential research at Knight Frank, said almost all of the world's wealthy represented by the survey had reported a fall in the value of their property portfolios last year, with prices either stalling or falling in three-quarters of cities.

"The figures paint a gloomy picture for prime residential prices round the world," he said. "It is now clear that not even the most desirable property round the world will remain immune."

The report shows that previously buoyant markets turned very quickly in the last months of the year.

Property prices in Dubai, for example, rose almost 11 per cent last year but fell by 19 per cent in the final quarter.