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Value of global real estate rises 5% to $326.5 trillion

The value of the world’s real estate assets rose 5% in 2020 to $326.5 trillion, making it the world’s most significant store of wealth and more valuable than all global equities and debt securities combined, and worth almost four times that of global GDP, according to new research released by Savills as part of its Impacts 2021 programme.

The growth in real estate’s value was driven by residential property - by far the largest real estate sector - which accounts for 79% of all global real estate value, says Savills. Residential saw its value increase by 8% between 2019 and 2020 to $258.5 trillion, driven by activity in China. The country now accounts for 30% of total global residential value, and this grew by 13% in 2020, driven by strong price growth coupled with the delivery of new supply, according to Savills.

The total value of global commercial property fell by 5% in 2020 to $32.6 trillion, but Savills says this fall was ‘on paper’ only, as commercial owners held firm during much of the pandemic and best in class assets continued to trade at robust values. Savills forecasts that the value of commercial property will rebound in 2021, reversing the falls of 2020 and pushing the total value of commercial to $34.3 trillion by the end of 2021, a new peak.

Global agricultural land is now valued at $35.4 trillion, following a period of exceptional growth in the last decade, although its total value declined by 7% in 2020, driven by land price falls in South America where political turmoil and the wider impact of Covid-19 have taken their toll.

Paul Tostevin, Director in Savills World Research team, comments: “Government stimulus in the wake of Covid-19 means there is plenty of capital at large, and real estate is viewed as a safe store as global investors search for income in a low interest rate environment. While real estate’s capital value annual growth of 5% in 2020 is lower than those seen in securitised debt, equities and gold, at 17%, 20% and 29% respectively, it is the extra income component of property which makes it such a compelling purchase for many buyers.”


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