Dubai's real estate market prices have fallen by the most in the world, according to Knight Frank’s Global House Price Index for the second quarter of 2015.

The index ranked Dubai's property sector 56th out of 56 markets covered around the world with an annual price slump of 12.2 percent.

Knight Frank also said prices in the emirate fell by 6.4 percent in the last six months and were down by 2.8 percent in the three months to the end of June.

The real estate consultancy said weaker demand, a strong US dollar and on-going cooling measures all contributed to the decline in property prices.

Globally, Knight Frank said house prices shifted marginally in the year to June, rising by only 0.1 percent. Lingering concerns over the Eurozone economy, jitters in global stock markets and discussions of when, not if, a US rate rise occurs is impinging on growth, it said in a statement.

The Hong Kong market continues to defy its policymakers’ cooling measures with mainstream prices up 20.7 percent year-on-year, topping the global list ahead of Turkey and Estonia.

Although China saw prices fall 5.7 percent year-on-year, it recorded positive quarterly growth of 0.2 percent.

Europe is no longer the weakest performing world region, a title it has held for 15 consecutive quarters, the index revealed.

Kate Everett-Allen, International Residential Research, Knight Frank said: “As China supplants Greece as the world’s key economic concern, and emerging markets look increasingly anaemic, there is a global quest for growth which is evident at a macroeconomic level but also when analysing house price performance.”