While price growth for property in Asia continues to dominate the headlines, Knight Frank's recent Prime Global Cites Index has indicated that investors can enjoy capital growth a little closer to home.
The consultancy found that luxury real estate in Paris has seen prices rise by 22 per cent over the past year, rivalling the performance of many Asian cities. Knight Frank explained that this was driven primarily by supply constraints and growing interest from overseas buyers.
A year ago there was a clear continental divide when it came to the performance of the world's prime property markets. Asian cities occupied the top rankings for price inflation while Europe and the US trailed far behind.
Indeed, the gap between the performance of Europe and Asia's top cities has narrowed as efforts by Asian governments to cool housing inflation have started to take effect and European markets come out of the downturn.
"There is now an increasing divergence between the performance of the prime global cities and their wider domestic markets," Liam Bailey, head of residential research at Knight Frank, said. "Governed less by affordability and macro-economics and more by international demand as well as fluctuations in supply and changing tax rules, these cities compete at a different level in attracting the world's wealthy elite."
Mr Bailey added that he remains confident that the next property cycle, which he believes has already started, will see the "consolidation of an elite tier of global city markets, where the top addresses will become increasingly fought over by wealthy buyers".
Knight Frank's global research follows the release of DTZ's flagship Money into Property 2011 report, which looks at European invested stock.
The firm noted that total invested stock increased by four per cent in 2010, indicating that European property markets have finally turned the corner - a marked contrast to the previous year's eight per cent decline.