Research reveals how real estate is growing and is the highest valued global asset class.
We all love property. Whether that is a chat about it with friends, working out how much our home is worth, changing the layout or interiors of our living room or simply investing in a condominium for our children. In fact Malaysians strive to be homeowners more than the rest of the world and there is good reason we are repeatedly told to get onto the property ladder in order to safeguard our future. But now there is even better reason.
Research conducted by real estate firm Savills estimate the world’s real estate is valued at USD 228 trillion. This is a rise of five percent from 2016 proving why it is a good investment asset class. This is especially the case if you compare property to other asset classes. All gold ever mined totals USD 6.5 trillion and stocks, shares and securitised debt accumulates to USD 170 trillion. Plus yearly GDP for 2015/2016 has only grown by 2.3 percent.
Property is tangible and we all need somewhere to live and work. Subsequently it performs well. Commercial property is growing the fastest increasing by seven percent. It has outperformed global bonds that only grew two percent, but global equities took the lead growing nine percent.
However residential property holds the highest value. Consisting of 75 percent of all real estate stock valued to be worth USD 168.5 trillion. A result of the world’s growing population that leads to 2.05 billion households across the world. Average homes therefore cost USD 82,000. Despite seven percent of the world’s population being in North America it holds 22 percent of the residential property assets. Europe trumps this with 23 percent value but has marginally more people at 11 percent.
Whilst much of the is wealth concentrated in the developed corners of the globe, the less developed countries undoubtedly have the most potential. 19 percent of the world population live in the Middle East and Africa but only 6 percent of the overall global residential property value is held here. The value of property in Asia is growing too with many seeing property as important asset class spurring on its value.
If you would like to increase the world’s real estate worth by increasing more value to your property view our online blog here.
