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Most investors know the golden rule of the stock market: don’t put all your eggs in one country’s basket. Even the most relaxed hammock investor doesn’t put their entire equity portfolio into domestic companies.
With real estate, that logic often seems to disappear.
Around the world, most property owners invest almost exclusively close to home. They own the house they live in, perhaps a rental flat in a neighbouring town or a small commercial unit around the corner. Their job, their savings, their pension and all their bricks and mortar depend on one economy, one currency and one tax system.
For decades, in a period of peaceful globalisation and predictable interest rates, that local concentration felt safe. Today, in a time of geopolitical tension, trade conflicts, shifting supply chains and strained public finances, holding all your property in one country is no longer automatically the cautious choice. It can be a weak spot instead.
How geopolitics is redrawing the property map
Major real estate advisers and research institutions now rank geopolitical risk high on the agenda of international investors. Anyone who keeps all their property within one national border is exposed to four structural risks:
- Changing rules and taxes: bricks cannot move. When governments face deficits, rising spending or housing shortages, domestic property is an easy target. Rent freezes, stricter renovation requirements (such as energy-performance rules), higher transfer taxes or new wealth taxes can quickly erode returns.
- A new map of world trade: geopolitical rifts and tariffs are forcing companies to reorganise their supply chains. Some traditional industrial regions face headwinds, while others, from Central and Eastern Europe to Mexico and Southeast Asia, see growing demand for logistics, light industry and workforce housing.
- Economies out of step: central banks no longer move in lockstep. Europe, North America and Asia each have their own inflation, demographics and interest rates. A local recession or credit crunch can depress property prices in your home market for years, while property elsewhere performs well.
- Energy and climate: conflicts often have a direct impact on energy and commodity prices. Property markets in regions with robust energy supply and infrastructure generally absorb such shocks better.
Four pillars of international diversification
1. Spreading across legal systems
Holding property under different legal systems, for example in Western Europe, North America and growth markets in Asia or the Middle East, makes your wealth less dependent on a single election, a single rule change or a single regional conflict.
2. Income in several currencies
Rental income in different currencies, such as the euro, the dollar, the pound or the Swiss franc, spreads currency risk. It works both ways, though: if the euro weakens, foreign property gains value in euro terms, but if the euro strengthens, the opposite happens.
3. Access to other property sectors
Investing only in a local flat means sitting in one small niche. Internationally, and through specialised property companies, sectors that carry the modern economy come within reach:
- Data centres and digital infrastructure, the physical backbone of the cloud and artificial intelligence.
- Logistics and industry, such as distribution centres and port warehouses along the major trade routes.
- Healthcare property and senior living, driven by ageing populations in developed countries.
4. Demographic balance
In large parts of Western Europe and East Asia the working-age population is shrinking, while other regions still have growing urban populations. An international portfolio can combine mature markets with stable income and markets that are still growing demographically.
Three ways to build international real estate exposure
International real estate is no longer reserved for sovereign wealth funds or very wealthy families. Broadly, there are three routes, which can also be combined:
| Route | Entry level | Liquidity | Effort | Main feature |
|---|---|---|---|---|
| Listed real estate (REITs and property funds) | Low | High, via the stock exchange | Limited | Broad diversification across hundreds of property companies and sectors |
| Property platforms and fractional ownership | Medium | Low to medium, often with a fixed term | Limited, managed by the platform | Targeted participation in specific projects or buildings abroad |
| Direct ownership abroad | High | Low, buying or selling takes months | High: management, local rules and taxes | Your own, tangible property with full control |
Listed real estate
REITs (Real Estate Investment Trusts) are listed companies that own and operate income-producing property. In the United States they must pay out at least 90% of their taxable income to shareholders; similar regimes exist in Europe, such as the Belgian regulated real estate company (GVV/SIR). Through a global property fund, an investor indirectly becomes a co-owner of shopping centres, data centres, hospitals, housing and logistics hubs in North America, Europe and Asia, without having to deal with tenants or foreign notaries. The downside: listed real estate moves with the stock market and reacts strongly to interest rates.
Property platforms
Specialised platforms let you take part in a particular project or building with a smaller amount. That allows targeted choices, but the money is often locked in for several years and the return depends heavily on the quality of the project and of the platform operator.
Direct ownership
Investors with more capital can buy property abroad directly, from a rental flat to a commercial building. That gives full control and a tangible asset, but also calls for local knowledge, reliable partners for management and attention to the legal and tax rules in two countries.
International real estate has risks too
Diversification reduces dependence on one market, but it does not remove risk. Investing across borders adds new points of attention:
- Currency risk: exchange rates can boost returns in euros, but also wipe them out.
- Local rules and taxes: property law, tenancy law and taxes differ widely between countries and can change.
- Limited liquidity: selling physical property takes time, especially in a weak market.
- Costs: purchase costs, management, insurance and local advisers weigh on the net return.
- Projects under development: with off-plan purchases, construction delays, the developer’s financial health and the market price at completion also come into play.
How we see it
At Vermeeren & Van Haute, international real estate is one of the six domains in which we invest for our own account. We are building a portfolio spread across several countries and markets, from let units to projects under development, and choose our markets and partners carefully, with attention to local rules and the risks of each project.
This article contains general information and is not investment advice, an offer or a recommendation. Investing in real estate involves risks, including loss of value, currency risk and limited liquidity; you may lose (part of) your investment. Past returns are no guarantee of future results. Legal and tax rules differ by country and depend on your personal situation.