Photo: TGraham
The total value of all the property on the planet is now worth almost three times the world’s GDP, according to Savills.
The adviser’s staggering research has analysed property prices across the entire developed property world, including commercial and residential property, as well as agricultural and forestry real estate. Together, they amount to a total of $217 trillion, which is the equivalent of around 60 per cent of mainstream global assets.
“To give this figure context, the total value of all the gold ever mined is approximately US$6 trillion, which pales in comparison to the total value of developed property by a factor of 36 to 1,” comments Yolande Barnes, Head of Savills World Research.
Residential property accounted for 75 per cent of the total value of global property = $162 trillion – which also has the largest spread of ownership with approximately 2.5 billion households and most closely tied with the fortunes of ordinary people. Residential real estate value is broadly distributed in line with the size of affluent populations: China accounts for nearly a quarter of the total value, containing nearly a fifth of the world’s population. Yet the weight of value lies with the West, over a fifth (21 per cent) of the world’s total residential asset value is in North America despite the fact that only 5 percent of the population lives there.
The trend for western nations to dominate real estate is most pronounced in commercial markets, where nearly half of the total asset value resides in North America. Europe makes up over a quarter while Asia and Australasia contain 22 percent, leaving just 5 percent for South America, the Middle East and Africa.
The report highlights the important role that real estate plays in economies worldwide, concludes Savills’ report.
“Real estate is the pre-eminent asset class which will be most impacted by global monetary conditions and investment activity and which, in turn, has the power to most impact national and international economies,” adds Barnes.