In 2016, researchers at Savills calculated that all of the world’s real estate totalled US$160 trillion. According to their more recent report, the figure increased in 2017 due to global asset price inflation.
- All the world’s property is worth £180 trillion
- Residential property makes up most of the world’s real estate value, taking up three quarters of real estate stock
- Europe contains 23% of the world’s residential property value, but only 11% of the world’s population
- There are 2.05 billion households, making the average home worth £64,121
- In 2016, real estate values across the world grew 5%
- “Global real estate [is] more valuable…than all stocks, shares and securitised debt, combined.”
High Annual Growth
GDP grew by 2.3% in 2015/16 versus a growth rate of 5% for the total value of the world’s real estate, meaning the asset value has outpaced income. This ratio of real estate assets to income is an increase from 2015.
Roughly 75% of all property stock is residential, and most of real estate’s value is within residential. This value is unequally distributed, with North America and Europe containing 18% of the world population but 45% of residential value. There is more potential for growth in less developed countries, especially Africa, as its economy and household income increases.
Real Estate Is Changing
Savills argue that the role of real estate is changing. As the globe’s most important asset class, it has increased by a huge amount since the financial crash of 2008. The scope for capital growth is arguably more limited than before, but it maintains its qualities of being a tangible asset that can be managed and changed. The focus has changed, in that people are now seeking long-term income through real estate.
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If you would like to read the Savills report in full, click here: Savills, How Much Is The World Worth?