Prices for luxury homes are heading towards historic highs, according to research from Christie's International Real Estate.

The new study, which compares the world's top property markets, attributed the rise in prices to limited inventory, strong international buyer demand, and high net worth individuals' increased appreciation for world class lifestyle offerings.

Cities including London, New York, Hong Kong, Paris, San Francisco, the Cote d'Azur, Toronto, Dallas, Los Angeles and Miami are all included in the index.

It showed that top tier property sales achieved record prices in several cities, bucking the weak activity of the general housing market in many countries as economic concerns continue to deter potential buyers.

Prestige residential real estate values will more likely follow growth trends of non-consumable luxury goods such as fine art more so than the growth trends of the general housing market, Christie's said.

The study also revealed that high net worth individuals are more likely to invest in an important global market than in another city within their home country for second or additional homes.

Cash transactions are popular when it comes to purchasing luxury homes, although recent tax law changes in a large number of markets are expected to negatively impact on market activity in 2013.

London recorded the highest home sale price in 2012, at $121 million, followed by New York, at $88 million.

Meanwhile, the Côte d'Azur recorded the highest percentage of both secondary home buyers, 95%, and international and non-local buyers, 90%.

Toronto's real estate market logged the lowest amount of days on the market for luxury listings at 46 days, but this figure is expected to lengthen in 2013.

Stephanie McMahon, head of research at Strutt & Parker commented: "International purchasers have been fundamental to the activity in the prime central London market in recent years, where values have been pushed ever higher. Overseas purchasers are interested in location rather than geography and therefore seek very specific areas across the globe.

"Whilst International is the focus of the report, it is worth remembering that such activity is, in reality, only a very small part of the London residential market which caters to a multitude of buyers transacting in the region of 7,000-9,000 sales per month."