The total value of all the property in the world hit a whopping $217 trillion (£153 trillion) in 2015 and is more than 12 times US GDP, or 21 times China’s GDP.
The figure, calculated by Savills, measures all property types, including commercial and residential property, as well as forestry and agricultural land.
The huge amount means that the world owns property assets that are almost three times it annual income – 2.7 times GDP. Property represents 60% of the total mainstream global assets, which include globally traded equities and securitised debt.
The $217 trillion figure is also equivalent to 36 times the total value of all the gold ever mined (approximately $6 trillion), 3.9 times the value of equities ($55 trillion) and 2.3 times the value of outstanding securitised debt ($94 trillion).
Savills’ study 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 do not form part of global property markets.
Head of World Research at Savills, Yolande Barnes, reports: “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 almost one third of the value of the global property market is readily investable at scale and the remaining $145 trillion is not traded in any meaningful way, but is owned by small entities and owner-occupiers.
The report also calculates a growth rate in global property prices of 1.77% per year. This has been estimated by analysing the growth in value of investment grade stock, which is property traded in deals worth more than $10m.
Global residential property is valued at $162 trillion (£113 trillion), or 75% of the total amount. Savills calculated this figure by establishing that there are 2.5 billion households in the world and the average residential property price is $43,000.
Total residential housing stock in the UK has been valued at £6.17 trillion, while housing wealth – net of mortgage debt – is £4.84 trillion, or 2.7 times GDP.
The largest proportion of residential value is in China and Hong Kong, at 24%, as around one fifth of the world’s population lives there.
And while just 5% of the world’s population lives in North America, it holds more than a fifth of the world’s total residential asset value.
North America’s real estate domination is even more marked in the commercial sector. Nearly half of the world’s commercial property wealth is there, with 28% in Europe and just 5% in Latin America, the Middle East and Africa combined.
The report states that the creation of new commercial property markets in these areas, as well as in Asia, represent a “potentially huge market”.
It adds: “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 54%.”1
Savills used many sources, including censuses, house price data and national property records, to compile its data.