Several key European markets also look attractive for prospective second home buyers due to the scale of price discounts now available. The French cities of Dordogne and Gascony have seen prices plummet 45 percent since 2008, while Praida Da Luz in Portugal has seen a 30 percent drop, according to Knight Frank.
Donald Han, Chesterton Singapore's managing director, highlights another reason why hot money is returning to developing European economies: "During the crisis, investors fled from these countries, preferring to put money in safer havens like the U.K. and Asia Pacific. But as Asian real estate values mature, reaching peak levels and inflicted by regulatory controls and credit tightening, these investors are now searching for the next growth areas."
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The vulnerable PIIGS (Portugal, Italy, Ireland, Greece and Spain) have all enjoyed modest rebounds in the first quarter of 2014 while their bond markets' coupon rates and interest rates have returned to half of what they were during the peak of the financial crisis.
Portugal's gross domestic product grew a revised 0.6 percent in the fourth quarter, accelerating from the previous quarter's 0.3 percent growth, while Spanish economic growth rose an annual 0.5 percent in the first quarter.
Even Greece is expected to post a 0.6 percent increase in economic growth of this year, according to government estimates.
"These countries now offer compelling price discounts and investors are slowly but surely starting to take notice," Han said. "These are the laggard markets, prices are beginning to turn the corner after being in the doldrums for many years."
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He added that several Asian real-estate developers like Hong Kong's Gaw Capital, Singapore's Ascott and China's Greenland Group have all started to look at Europe to promote geographic spread and diversity in order to fuel revenue growth.
On the opposite side of the spectrum, the report noted Belgium, Norway and Canada are among the cities most at risk of a price correction.