Luxury homes became more affordable last year as the financial crisis eroded prices from Monaco to Barbados, according to Knight Frank.

Prime real-estate values at 56 locations declined by an average of 5.5%, the London-based property broker said in a report published today. Monaco was the most expensive market for the second year in a row, followed by London and Paris.

Wealthy individuals put off making purchases in 2009 because of concern about the economy, Knight Frank said. Prices of properties in the countryside, coastal locations and ski resorts, often bought as second homes, fell by at least 12%. The biggest declines were in Dubai, in the western part of Portugal’s Algarve, in Palma on the Spanish island of Mallorca and in Dublin, where values fell at least 22%.

“Cities tend to perform better because they are necessity driven, whereas resorts and country pads are more discretionary purchases,” said Liam Bailey, Knight Frank’s head of residential research.