The term international real estate describes a relatively new phenomenon, beginning in the 1980s and keeping pace with globalization

Globalization

Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...

. The term encompasses real property development, sales and leasing transactions across national borders. International real estate could be viewed as one of the most dynamic branches of real estate although it is, by definition, influenced by fluctuating market value in various sectors between countries, as can be evidenced by the 2008 global credit crisis.

International real estate is best subdivided into two categories: international commercial real estate and international residential real estate. Some examples of international real estate transactions are:

• an citizen of one country purchases a house in another country
• a corporation headquartered in one country purchases or leases an office building another country
• a corporation or investment group in one country builds a hotel in another country

International commercial real estate

Most international commercial real estate transactions will take place between corporations and may involve, lead to or be a consequence of legal, design, urban planning, engineering, financing, and construction work. From a national government perspective, attracting foreign investment into real estate development projects can be a key priority for increasing country revenue and a key strategy for increasing the availability of national infrastructure and amenities.

Some of the factors leading to the growth in the international commercial real estate sector are:

• the post-war growth in urban development and infrastructure in both developed and developing nations;
• business' evolution toward multi-national business operations;
• the growth in international investment practices enabling investors to look outside their own countries for above average performing investments.

International residential real estate

Most international residential real estate transactions are generated by individuals purchasing lots or built units (including family homes, apartments, condominium units). These purchases form the bulk of what is sometimes referred to as the vacation/second home market or residential tourism market.

Some of the factors leading to the growth in the international residential real estate sector are:

• the rise in international tourism
  Tourism
  Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
  
   and travel;
• the baby boomer
  Baby boomer
  A baby boomer is a person who was born during the demographic Post-World War II baby boom and who grew up during the period between 1946 and 1964. The term "baby boomer" is sometimes used in a cultural context. Therefore, it is impossible to achieve broad consensus of a precise definition, even...
  
  generation reaching retirement age and looking for more flexible retirement options;
• the increase in available information on the World Wide Web regarding property listings in countries around the world.