Worldwide real estate worth more than US$200 trillion

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Global real estate advisory firm Savills has released what it claims is world-first research into the total value of the world’s developed real estate assets.

According to Savills, world-wide developed real estate was worth US$217 trillion in 2015, 2.7 times the value of the world’s GDP.

Yolande Barnes, Savills’ head of world research, said the world’s real estate is currently worth more than 30 times the value of all gold that has been mined.

“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,” Barnes said.

According to Savills, worldwide developed residential real estate is worth $162 trillion, or 75% of the total value of global real estate.

The remaining 25% of the global value is split relatively even between commercial real estate ($29 trillion) and agricultural and forestry real estate ($26 trillion).

According to Savills, current low interest rates across world have helped global real estate reach a point where it accounts for 60% of mainstream global assets.

“In recent years, quantitative easing and resulting low interest rates have suppressed real estate yields and fuelled high levels of asset appreciation globally,” the Savills research said.

“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,” Savills said.

According to Barnes, the current value of global real estate shows how important the sector has become to economies across the globe.

“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,” she said

“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.”

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