After a period of property and economic crisis, the European real estate market has been strong in recent years. International investors are still bullish about prospects, driving further growth in several European property markets into 2019. Even in the UK, despite much post-Brexit uncertainty, big cities such as London and Birmingham remain on an upward trajectory.
Real estate markets in Europe, however, whether commercial or residential, are actually very expensive. Considering that crises are high and property assets are trading at incredibly low property yields; this makes the underlying value of properties very high. However, even if it is expensive and the yields are not high, real estate still offers a cash yield or a net rental income of a few percent; a high return compared to zero interest offered on other assets.
Some emerging markets are in trouble with declining growth rates and lower commodity prices. Rich investors from emerging markets are turning to Europe because they had to diversify due to such problems.
There are property markets performing well in general with lots of international capital flows. In essence, real estate is equivalent to a secured bond, especially if you buy in the prime property markets in Germany, for example. But anywhere in Europe, you still have the potential for a better economy and higher inflation positively influencing your investment. This is the main reason why real estate in continental Europe and recovering markets has performed so well.