The total value of world real estate reached $217tn (£153tn) in 2015 – $217 million million – and is more than 12 times US GDP, or 21 times China’s GDP.
This figure measures the entire property universe, including commercial and residential property as well as forestry and agricultural land.
This means that the world owns real estate assets that are nearly three times its annual income – 2.7 times GDP. Property represents 60pc of the total of mainstream global assets, which also includes globally traded equities and securitised debt.
It is also equivalent to 36 times the total value of all the gold ever mined (approximately $6tn), 2.3 times the value of outstanding securitised debt ($94tn), and 3.9 times the total value of equities ($55tn).
The research, carried out by Savills, does not include commercial properties that are not formally recorded, such as shops, workshops and other small business premises.
While important to economic growth, particularly in emerging markets, these are not part of global property markets, which is quantified here. This is the first time that such a value has been calculated.
Yolande Barnes, head of Savills world research, said: “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.
“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.”
Savills estimates that nearly one third of the value of the global real estate market is readily investable at scale, and the rest, $145tn, is not traded in any meaningful way, but is owned by small entities and owner-occupiers.
The report also estimates a growth rate in global property prices of 1.77pc per year. This has been calculated by looking at the growth in value of ‘investment grade stock’, that is property traded in deals worth over $10m. This takes into account their last estimate of real estate value in 2013, and extrapolates a growth rate.
Global residential property is valued at $162tn (£113tn), or 75pc of the total amount. Savills said that taking into account that there are 2.5bn households in the world, the average residential house price is $43,000. Total residential housing stock in the UK has been valued at £6.17tn by Savills, while housing wealth – net of mortgage debt – is £4.84tn, or 2.7 times GDP.
The largest proportion of residential value lies in China and Hong Kong, at 24pc, reflecting how almost one fifth of the world’s population lives there.
And while only 5pc of the world’s population lives in North America, it holds over one fifth of the world’s total residential asset value.
North America’s domination of real estate wealth is even more pronounced in the commercial market. Almost half of the world’s commercial property wealth is there, with 28pc in Europe and just 5pc in Latin America, the Middle East and Africa combined.
The report highlights that the creation of new commercial real estate markets in these areas, as well as Asia, represent a “potentially huge market”. It added: “If the quantity and value of commercial space in these regions were to reach the current global average per head of population, the total value of commercial real estate globally would rise by 54pc.”
The value was calculated using a wealth of sources, including census, house price data, and national property records.
The Daily Telegraph UK