According to new research from Savills, the global stock of residential and commercial real estate equals 2.7 times the world's GDP, hugely outweighing the value of all gold in existence.
"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 37 to 1," said Yolande Barnes, head of Savills world research.
International estate agency Savills values the world's residential real estate stock at $162 trillion, more than the $155 trillion-worth of all globally-traded equities and securitised debt instruments combined.
If the wealth of residential stock – spread over approximately 2.5-billion households – is added to commercial ($US29 trillion) and agricultural land ($US26 billion), the value of measurable global real estate comes to $US 217 trillion.
"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," Ms Barnes 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".
The global residential real estate figures reflect the reality of a global economy dominated by the West. China accounts for nearly a fifth of the world's population and its real estate market makes up almost a quarter of the total value. That's broadly representative. However, a fact that surprises is that more than a 21% of the total residential asset value lies in North America – despite it only being home to 5% of the global population.
The research reflects the exponential rise of cross-border investment across real estate asset classes and also the continued difficulties domestic home buyers have in terms of affordability. Many economies around the world have courted investment in property markets in recent years and some consider this to be to the detriment of domestic first-time buyers.
There is likely to be an increase in measures to cool investment markets. For example in the UK, BTL investors face an additional 3% stamp duty that is due to be levied as from April 2016. Tax relief on mortgages for second home and investment property purchases is also due to be significantly reduced from April 2017.