The price of luxury homes in Sydney has seen the city climb to the third spot on Knight Frank's latest Prime Global Cities Index, a measure of luxury residential price movements across 35 cities. Sydney was in tenth position last quarter.

Melbourne has moved up to number seven in luxury residential price movements, and was previously eleventh in the first quarter of the year.

The firm says the index enables investors and developers to monitor and compare the performance of prime residential prices across key global cities, with prime property corresponding to the top five per cent of the wider housing market in each city.

Knight Frank's Director of Residential Research for Australia, Michelle Ciesielski, said that luxury residential values across the globe have been rising for 22 consecutive quarters, but the pace of growth has almost halved in the last year. 

The top cities were Vancouver, Miami and Sydney increasing by 15 percent, 14 percent and 13 percent respectively in the year to June 2015. Asian cities continue to rise up the ranks with seven of the top ten cities now in the Asia Pacific region. Australasia has recorded an average growth of 10.2 percent over the 12-month period.

And while Sydney and Melbourne have risen up the ranks, Singapore has seen a 15 percent decline in prime residential prices. In Hong Kong, luxury prices have increased by almost 7 percent in the year to June despite the government introducing a new cooling measure where a 40 percent deposit is required for properties under HK$7 million (US$900,000).