The total value of all developed real estate on the globe hit $217 trillion in 2015 – 36 times the total value of gold ever mined, according to a new analysis released by a London-based adviser on Monday.
The analysis by Savills measures the entire developed property universe, including commercial and residential property as well as forestry and agricultural land.
The value of global property in 2015 amounted to 2.7 times the world’s GDP, making up roughly 60% of mainstream global assets and representing an important store of national, corporate and individual wealth.
Residential property accounted for 75% of the total value of global property.
Yolande Barnes, head of Savills World Research, said: “To give this figure context, the total value of all the gold ever mined is approximately $6 trillion, which pales in comparison to the total value of developed property by a factor of 36 to 1.”
She added: “The value of global real estate exceeds – by almost a third – the total value of all globally traded equities and securitised debt instruments put together and this highlights the important role that real estate plays in economies worldwide.”
In recent years, Savills said, quantitative easing and resulting low interest rates suppressed real estate yields and fuelled high levels of asset appreciation globally. Investment activity and capital growth swept around the world’s major real estate markets and led to asset price inflation in many instances.
Overall, the biggest and most important component of global real estate value is the homes people live in, totalling $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 (21%) of the world’s total residential asset value is in North America despite the fact that only 5% of the population lives there.
The trend for western nations to dominate real estate is most pronounced in commercial markets, where nearly half the total asset value resides in North America. Europe makes up over a quarter while Asia and Australasia contain 22%, leaving just 5% for South America, the Middle East and Africa.