When the world's priciest apartment turns out to be a phantom sale you know there are cracks in the top-end real estate sector. And cracks there are. Even before a $57m sale fell through in Hong Kong, developers of luxury homes in Moscow were slashing prices and Shanghai was emitting a loud popping sound. In New York, transactions are running at around half peak levels. Even Monaco, haven of the mega-rich, is no longer a buyers' paradise: purchases are 40 per cent below last year's levels as tax refugees rent rather than buy.

It is hard to see demand for luxury homes flourish. This is a world where greed is bad: bankers' bonuses are under attack, along with chief executives' remuneration. Gordon Gekko, embodiment of the 1980s “greed is good” philosophy, remains incarcerated until September's release of Wall Street 2. In London, where luxury prices are just a few percentage points off the March 2008 peak and two ￡50m-plus Belgravia homes changed hands this year, the saving grace is foreign money. More than half of homes worth more than ￡5m go to overseas buyers, spurred by a weak sterling and discounted prices. As those unravel, Russian and Middle Eastern buyers – who also face problems in their home markets – may find themselves less willing to tie up money in the UK.

Yet there is room for some optimism. Supply, currently depressed alongside prices, is structurally curbed at the top end. There is a limit to the number of old town houses in Manhattan, and swish new apartments commanding panoramic views of Hong Kong harbour are strictly numbered. Besides, the spectre of inflation is hovering, and bricks and mortar serve as an ideal hedge; hence Hong Kong's own sky-high prices. In housing at least, it's less tough at the top than at the bottom.