Global growth across all asset classes has slowed in 2022 compared with the prior year, but real estate has maintained its position as the world’s most preferred store of wealth, according to Savills.
The company’s research shows that the value of all global real estate reached $379.7tn (£310tn) at the end of 2022, down by 2.8% from $390.5tn recorded at the end of 2021. The decline follows spikes in interest rates and inflation.
When compared with pre-Covid levels in 2019, the values are up by almost 19%.
The residential sector accounted for 76% of all global real estate value in 2022, totalling $287.6tn, a decrease of 1.6% on 2021 levels, when it stood at $292.2tn.
Commercial real estate was valued at $50.8tn at the end of last year, versus $51.7tn in 2021. The sector represents 13% of total real estate value.
The total value of agricultural land was $41.3tn, accounting for 11% of total real estate value in 2022. The sector has also seen a decrease from its 2021 levels, when it was valued at $46.6tn.
Geographically, China was the world’s most valuable real estate market, at almost $90tn and accounting for 26% of total global real estate value. It is followed by the US, which accounts for 19% and is valued at around $65tn. Japan, Germany and the UK rounded out the top five most valuable real estate markets, with values of $20tn, $17tn and just over $10tn respectively.
Elsewhere, Canada, which was ranked seventh by Savills, and Australia, which sat in tenth place, ranked ahead of much more populous nations for total real estate value. This is after both countries experienced sharp growth in residential prices in recent years.
India, vying with China to be the world’s most populous country, is in 14th position by value, signalling the potential for future growth in this market, according to Savills.
Paul Tostevin, head of Savills World Research, said: “Despite upheavals in the markets, and some speculation about the future of some sectors, real estate as a whole continues to be the largest concentration of wealth in the world.
“It is clear that given the underdeveloped nature of real estate in some locations on a long-term basis, growth will continue as more stock is added around the world.”
In comparison, the value of all global equities and debt securities totalled $98.9tn and $129.8tn respectively, while global GDP reached $100.6tn, according to Savills. The value of all the gold ever mined stands at $12.2tn, just 3% of the value of all global real estate.
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