A two-speed market has emerged in Perth's housing sector with the most expensive properties showing signs of recovery while lending data indicates the lower end continues to stagnate.

The most expensive Perth homes increased in value by 1.5 per cent over the second quarter of 2018, according to Knight Frank's Prime Global Cities Index.

Key points: Perth premium homes have increased in value by 1.5 per cent in the most recent quarter

Perth premium homes have increased in value by 1.5 per cent in the most recent quarter The turnaround comes as the general property market continues to stagnate

The turnaround comes as the general property market continues to stagnate This is in the face of a premium property slowdown in Sydney and Melbourne

The index tracks growth in values in the priciest 5 per cent of homes in 43 capital cities around the world.

Perth saw a 2.7 per cent jump in the top-end market over the 12 months to June, although its ranking fell two places to 23rd in the second quarter of 2018.

The growth in blue ribbon property comes as globally market values trend downward in prestige homes.

Sydney growth slowed to 5.7 per cent over the same 12 months, seeing its ranking fall to 15, down from six the previous year.

Melbourne's ranking fell seven places to 17th on the same period.

Real Estate Institute WA president Hayden Groves said high-end property took an immediate hit as the state's mining sector slowed rapidly post 2014, but then demand rallied.

"It got down to such a low point … people that were in the market saw that properties in those blue ribbon aspirational-type suburbs became very much more affordable," Mr Groves said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 51 seconds 1 m 51 s How WA went from boom to bust

"At the same time, you have got sellers who have perhaps been holding that asset for a number of years who haven't seen a lot of meaningful capital growth in that asset so they're holding back on listing it in the anticipation that the market has bottomed.

"A shortage of supply, there's an underpinning of demand there, and that's what's pushing the values of those million-dollar-plus properties up."

REIWA data shows a sharp jump in sales in homes worth more than $1 million during the mining boom, then figures plateau.

The figures do not include the sale of the notorious Taj on Swan site in Perth's most exclusive suburb, Peppermint Grove, for $17 million earlier this month.

The grand Taj on Swan site sat empty for years after its owners left the country pursued by the ATO over alleged debts. ( Supplied: Sean Guilbert )

Buyers aren't borrowing as much

Data from the Australian Bureau of Statistics out today showed WA continued a downward trend in housing lending from a peak in May 2014.

It follows weak economic and population growth, which analysts say will continue to stifle recovery in the sector.

Mr Groves said tighter lending practices by the banks in part in response to the banking royal commission meant there was less credit in the Australian market.

According to the Knight Frank index, the southern Chinese city of Guangzhou saw the highest price growth of 11.9 per cent in the 12 months to June, but globally prices are slowing.

The report notes last quarter seven cities registered double-digit annual price growth, this quarter only three: Guangzhou (11.9 per cent), Singapore (11.5 per cent) and Madrid (10.3 per cent).

"The introduction of new, and the strengthening of existing, property market regulations, along with the rising cost of finance and a degree of political uncertainty is resulting in more moderate price growth at the luxury end of the world's top residential markets," the report notes.

Housing lending in Western Australia has fallen from a peak in May 2014.