Real Estate Retains Position World’s Largest Store Wealth Worth Us3933 Tril Savills
Savills research has revealed that property remains the world’s leading store of wealth, a title it has held for many years. According to the global real estate services provider, the total value of all commercial and residential real estate, as well as agricultural land, stood at US$393.3 trillion ($507.1 trillion) at the start of 2021. While this marks a slight decline of 0.5% compared to the previous year, it is still significantly higher than global GDP growth.
The decline in value can be attributed to falling property prices in China, which accounts for nearly a quarter of global residential value. Despite this, real estate remains the largest asset class globally, surpassing the value of both debt securities and equities. In fact, its value even exceeds that of all gold ever mined.
China retains its position as the most valuable real estate market, with a whopping 23.5% share of the global market for residential and commercial real estate. Following closely behind is the United States, holding 20.7% of the market share. Other notable countries in the top 10 include Japan, Germany, the United Kingdom, France, Canada, Australia, South Korea, and Italy. Together, these top 10 markets make up 71% of the world’s total real estate value.
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Commercial real estate saw an increase in value, rising by 4.1% from the previous year to reach US$58.5 trillion. This growth was driven by the development of new properties and stabilizing values. Some markets, such as the US, also saw an increase in investment due to onshoring efforts, which boosted the manufacturing sector.
Despite varying growth rates across different sectors and countries, real estate remains a relevant and valuable asset class in the ever-evolving investment landscape. According to Paul Tostevin, head of Savills World Research, while short-term factors like interest rates and market cycles can affect the value of certain types of property, real estate’s long-term position as the world’s most valuable asset class will likely remain.
