Sydney and Melbourne are among the top 15 fastest growing prestige property markets in the world, a new report shows.

Despite an easing of price growth across Sydney generally, the city’s top-end property market recorded double digit annual growth in 2017, according to Knight Frank’s 2018 Wealth Report.

Of 100 cities analysed, Sydney ranked 9th in the report’s Prime International Residential Index, beating Melbourne which placed 14th – down from 12th place last year.

Topping the list was Guangzhou, China, where luxury property prices increased by more than 27 per cent, followed by Cape Town (19.9 per cent) and Aspen (19 per cent).

Sydney’s prime market – the top 5 per cent – recorded 10.7 per cent annual growth, which saw it jump from last year’s 11th place ranking. By comparison Sydney’s median house price grew just 4 per cent over the 12 months to December, according to Domain Group data.

“Strong appetite for prime property remains and the lack of prime stock in Sydney has continued to place [the city] ahead of Melbourne,” said Knight Frank’s Australian head of residential, Sarah Harding.

It’s this lack of supply, particularly for detached houses, which pushed Sydney’s prime market growth ahead of Melbourne’s 9.8 per cent annual increase.

Meanwhile, Perth, the only other Australian city analysed, came in equal 55th place with Tel Aviv, thanks to 1.3 per cent annual growth.

“Perth is an exciting market,” said Michelle Ciesielski, Knight Frank’s head of residential research for Australia. “It’s the first time in the last three years we’ve had positive annual growth.”

“Perth’s prime property market is up from -6.4 per cent last year to 1.3 per cent this year,” she said. “The worst is obviously behind … we are seeing local buyers re-entering that prestige market and also our agents are also getting more inquiry from Melbourne and Sydney buyers.”

Australia is the third most-prefered global destination, after the United Kingdon and United States, for buyers with a net worth over US$30 million [excluding their primary residence] to emigrate to.

“In terms of purchasing prime property in 2018, those based in Malaysia, Singapore, China, Hong Kong and the Philippines, were most likely to plan to buy in Australia,” said Ms Ciesielski.

Part of Australia’s appeal is it’s “relatively more affordable” supply of trophy homes, Ms Ciesielski added.

While US$1 million will only get you 16 square metres of prime property in Monaco, 22 square metres in Hong Kong, or 25 square metres in New York, the report found that sum would stretch to 44 square metres in Sydney, 90 square metres in Melbourne and 136 square metres in Perth.

Sydney and Melbourne also held onto their respective 11th and 20th place rankings in Knight Frank’s annual City Wealth Index, which identifies the cities that matter the most to the wealthy by analysing current wealth, investment, lifestyle and future economic performance.

Despite this, Ms Ciesielski said demand for prestige property was expected to ease in 2018.

“We’ve seen very strong growth in Sydney and Melbourne in this prime space for the last couple of years but we are starting to see buyers taking longer to do due diligence…with the recent tax implications for foreign buyers and we do think there will be a slow down in 2018.”

Selling agent Ben Collier of The Agency said there was still a good depth of buyers in the Sydney market, despite the pull back from foreign buyers.

“Chinese buyers are not the powerhouse that they once were, due to the inability to get funds out of the country,” he said.

“We’re seeing a lot of activity in Bellevue Hill north of $12 million, and a have seen a few big sales in Vaucluse.”