World real estate assets hit $217 trillion in 2015

A NEW report published has revealed that the total value of all developed real estate on the globe reached US$217 trillion in 2015

The value of global property in 2015 amounted to 2.7 times the world’s GDP, making up roughly 60per cent of mainstream global assets and representing an important store of national, corporate and individual wealth. Residential property accounted for 75 per cent of the total value of global property.

The analysis from international real estate adviser, Savills, says for the first time, measures the entire developed property universe including commercial and residential property as well as forestry and agricultural land.

“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, according to the head of Savills world research, Yolande Barnes.

“The value of global real estate exceeds – by almost a third – the total value of all globally traded equities and securitized debt instruments put together and this highlights the important role that real estate plays in economies worldwide. 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,” she said in a report by PropertyInsider.

In recent years, quantitative easing and resulting low-interest rates have suppressed real estate yields and fuelled high levels of asset appreciation globally. Investment activity and capital growth has swept around the major real estate markets of the world and led to asset price inflation in many instances.

Overall, the biggest and most important component of global real estate value is the homes that people live in, totaling US$162 trillion. The sector has the largest spread of ownership with approximately 2.5 billion households and is 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 (21per cent) of the world’s total residential asset value is in North America despite the fact that only 5 per cent of the population lives there.