SINGAPORE was the 9th most expensive city location in the world last year, even as prices of homes in prime locations slipped 15 per cent, according to the latest Wealth Report by Knight Frank and Citi private bank released on Monday.

It was in 8th position in 2007.

Around the globe, it was largely a picture of gloom for prime home prices.

In Monaco, which was the most expensive city in the world, fourth quarter prime home prices fell 10.7 per cent from the third, although they grew 2.1 per cent for the whole year.

London, followed by Manhattan, New York and Moscow were in second, third and fourth positions.

Paris was the fifth most expensive, followed by Tokyo and Hong Kong.

Rome came before Singapore and in 10th spot was Sydney.

The biggest fall was seen in Hong Kong prime home prices. They fell a whopping 26.6 per cent in the fourth quarter, compared with the third, and 24.5 per cent for the whole year.

The luxury housing sector is potentially more vulnerable to economic shocks than the mainstream market, said Knight Frank's head of residential research, Mr Liam Bailey, in the report.

'The lesson to draw from the last two years is that no market, no matter how luxurious, can escape a bubble-and-bust scenario,' he said.

'However, when the market believes prices have returned to offer good value, activity will rise and the perennial factors that make a true prime market desirable will endure.'