Real estate has traditionally been a local business, but more and more, it’s becoming global, the same way so many other businesses have. On a year-to-year basis, we’ve been seeing global cross-border flows into real estate increase by 10 percent. In 2017, we continued to see this, despite the increasing geopolitical risks. This was a year of uncertainty: There was a new American president inaugurated; big election cycles in France, Germany, and Italy; and the question of Brexit. You would expect all those things to slow the flow of money, but they didn’t. The year 2017 is proof that this trend is not going away.

This trend is being driven by two things. The first is the wealth buildup in Asia. The domestic real estate markets in Asia are still small, so Asian real estate investors have turned to Europe and the United States. (This year, for the first time since 2007, Asian investors are the largest cross-border investors, with US investors relegated to second place.) The second is the move toward transparency in real estate markets. It’s easier now for an investor to come into a foreign market like London or New York and get treated the same way that a local investor would.

The globalization of real estate is a positive change for this sector—and for other sectors as well. Real estate investment is about forming relationships, and from relationships come other business opportunities. Cross-border real estate investment is also stabilizing real estate markets. Take London, for example. For several years, it was the number one city for real estate investment. You would have expected that to change dramatically after the Brexit vote—and it did. A lot of European and US investors lost interest in London, but Asian investors filled that gap instantly and prevented prices from falling dramatically—showing the global impact on local real estate.

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