In the EU, interest rates, in general and for mortgages, are still very low, in the 1 to 2% range. Still, even they have increased from the bottom seen one to two years ago. As the European Central Bank is planning to stop its very loose monetary policy, the EU market could very well follow the US and price increases should weaken or even turn negative in the future.
In China things are pretty similar, however given the importance of the trade tensions with the US, the risk of a slowdown in domestic consumption, and thus money to invest in real estate, may be higher than elsewhere. Given the state control of the market, swift support could come quickly if needed or warranted. It remains to be seen if the authorities are ready to step in when the general feeling is that is that there is already much oversupply of private real estate in the market, too much stock that still needs to get sold. The typical pragmatism of the Chinese leaders may lead to them not to support the market, rather let it have a controlled crash to restore the balance of supply and demand, as long as it is orderly.
What to do about real estate in your investment portfolio?
First and foremost, if you own your own home, you probably already have a large proportion of your assets in real estate. This situation increases substantially if you would have a holiday or second home too. In such case, for diversification reasons, it may be good not to add real estate exposure to your assets. Should you still consider to do so, it is advised to rather purchase real estate in another country or commercial real estate for diversification.
On the secondary home question, have you ever studied the cost of it? Including the cost of cleaning and making up the beds, or mowing the lawn, as compared to staying at the hotel? Of course, it is nice to have your own place for holidays or leisure, but you have to go there regularly and maintain it properly to make it worthwhile. Thus, from an investment perspective a second home may not be the best thing to invest in.
If you rent, or your home is only a small part of your assets, then all options are open. It is however very useful to study investments in real estate companies or mutual funds carefully as compared to direct investments in real estate. Do you want to have the hassle of dealing with tenants and the tax man? Or do you prefer to have the company or fund you invest in deal with that, at a certain cost to you of course, but with much greater liquidity than solid bricks? If you are contemplating buying your own home, given that the real estate markets may be slowing down, you may gain some bargaining power in almost all markets, but you may have to wait longer for capital gains to materialize.