Real estate remains the world’s largest store of wealth, with its collective value reaching nearly $393.3 trillion at the beginning of this year. That is approximately four times the global domestic product, according to a Savills report.
The United States maintains the most valuable commercial real estate market worldwide, accounting for one-third of the $58.5 trillion global sector output market, or $19.4 trillion. The nation ranks second behind China in total real estate value, representing 20.7% of the global market compared with China’s 23.5%. Worldwide, CRE value increased 4.1% annually, supported by the development of new stock and stabilizing values. The U.S., in particular, was buoyed by increased investment in manufacturing amid onshoring trends.
Savills’ totals encompass the value of residential and commercial real estate and agricultural land, and include illiquid assets like schools, civic buildings and hospitals. The world’s real estate value exceeds the combined value of global equities, debt and gold.
“In fact, the value of all the gold ever mined ($20.2 trillion) equates to just over 5% of real estate’s total worth,” Savills wrote.
Residential accounted for most of the world’s real estate value at $287 trillion and agricultural land made up $48 trillion. The value of debt securities around the world is $144 trillion and equities are worth $126 trillion. Global GDP is $110.5 trillion.
The total value of global real estate has increased by 21.3% since 2019, in line with global GDP growth over the same period of 25.6%. However, the category showed a slight annual decline of 0.5% due to a 2.7% reduction in the value of global residential stock. This was driven by falling property values in China, which accounts for a quarter of global residential value. Residential values grew in most countries.
Outside of China and the United States, which dominate worldwide real estate values, the top 10 global real estate markets include Japan, Germany, the United Kingdom, France, Canada, Australia, South Korea and Italy.
“While the pace of growth may vary across sectors and geographies, real estate’s long-term fundamentals remain strong: it is a store of wealth, a driver of economic growth and development, and its ability to reflect global economic shifts ensures its continued relevance in an evolving investment landscape,” said Paul Tostevin, head of Savills World Research. “While shorter-term factors, such as elevated interest rates and market cycles, can affect the values of certain types of property, long-term real estate’s position as the world’s most valuable asset class looks set to remain.”
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