Real Estate Retains Position World’s Largest Store Wealth Worth Us3933 Tril Savills
According to recent research conducted by Savills, property remains the world’s leading store of wealth. As of the beginning of this year, the combined value of global real estate, including residential, commercial, and agricultural land, was estimated at US$393.3 trillion ($507.1 trillion).
This figure represents a slight decline of 0.5% compared to the previous year, largely due to a 2.7% decrease in the value of global residential stock, which amounted to US$286.9 trillion. The decline can be attributed to falling property values in China, which holds a significant portion of global residential value.
Despite this decline, real estate continues to be the largest asset class globally, surpassing the value of debt securities (US$144.8 trillion) and equities (US$135.7 trillion) as of the beginning of 2020. It also exceeds the value of all gold ever mined, which is estimated at US$20.2 trillion. The total value of global real estate has increased by 21.3% since 2019, which is in line with global GDP growth during the same period.
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China retains its position as the most valuable real estate market, with 23.5% of the worldwide value for residential and commercial real estate. The United States follows closely behind with 20.7%. Other top markets include Japan, Germany, the United Kingdom, France, Canada, Australia, South Korea, and Italy, which together make up 71% of the world’s total real estate value.
The commercial real estate sector saw a growth of 4.1%, reaching US$58.5 trillion in value. This growth can be attributed to the development of new commercial stock and stabilizing property values. Some markets, such as the US, also saw an increase in investment due to onshoring efforts, which boosted the manufacturing sector.
While there may be variations in growth rates across different sectors and regions, real estate remains a crucial asset in the ever-evolving investment landscape, according to Paul Tostevin, head of Savills World Research. He believes that while external factors like interest rates and market cycles may impact certain types of property in the short term, real estate will continue to maintain its position as the world’s most valuable asset class in the long run.
Overall, the commercial property market continues to show promising growth, with Savills expanding its Apac capital markets team and projections of a 180% increase in branded residences in Southeast Asia by 2031. Dubai retains its top position in the Savills Executive Nomad Index, while new countries have entered the ranking. It is clear that real estate remains a strong and relevant investment option for the future.