Real Estate Retains Position World’s Largest Store Wealth Worth Us3933 Tril Savills
According to research by Savills, property remains the world’s top store of wealth. The combined value of global real estate, including residential, commercial, and agricultural land, stood at an impressive US$393.3 trillion ($507.1 trillion) at the beginning of this year. While there was a slight decrease of 0.5% compared to the previous year, this decline can be attributed to falling property values in China, which comprises nearly a quarter of the world’s 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) at the start of 2021. It also surpasses the value of all gold ever mined, which is estimated at US$20.2 trillion. Over the past two years, the total value of global real estate has increased by 21.3%, in line with global GDP growth during the same period.
China remains the most valuable real estate market, accounting for 23.5% of the total global value for residential and commercial real estate. This is followed by the United States at 20.7%. Other top markets include Japan, Germany, the United Kingdom, France, Canada, Australia, South Korea, and Italy. Together, these top 10 markets make up 71% of the total global real estate value.
The commercial real estate sector saw a growth of 4.1% in value compared to the previous year, reaching US$58.5 trillion. This growth was driven by the development of new properties and stabilization of property values. Some markets, such as the US, also saw an increase in investment thanks to efforts to bring manufacturing back onshore.
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Despite varying growth rates across sectors and regions, real estate remains a relevant and valuable asset class in today’s investment landscape, according to Paul Tostevin, head of Savills World Research. While short-term factors like interest rates and market cycles can affect property values, real estate’s long-term position as the most valuable asset class in the world is likely to remain unchanged.