Adam’s take on the Global Real Estate Market

The total value of the real estate on a global rank in 2015 reached an astonishing $217 trillion which is 36 times the total value of gold ever mined, shares real estate executive Adam Hochfelder. This figure is 12 times bigger than the gross domestic product (GDP) of the US, which is the world’s richest country, and 21 times that of China. It is also nearly 3 times the annual income of the entire world.

This value was obtained with the help of different sources like house price data, census, and national property records. Hochfelder didn’t take into consideration shops, workshops, other small business premises, or commercial properties that do not have formal records. The analysis includes all developed property globally, such as commercial and residential property, as well as forestry and agricultural land. The global property value of 2015 is estimated to be 2.7 times the world’s GDP, which is around 60% of the mainstream global assets, and that is an important store of national, corporate, and individual wealth.

The value of global real estate is an important factor in the economies of the world. Real estate can be most impacted by global monetary conditions and investment activity. It also has the power to impact most national and international economies.
Adam Hochfelder says that residential property accounted for 75% of the total value of the global property. This value of global real estate exceeds the total value of all globally traded equities and securities debt instruments put together and this emphasizes the huge role that real estate plays in all economies throughout the world. Capital growth and investment activity swept the world’s major real estate markets and resulted in asset price inflation in many instances.

The biggest and probably the most important component of the global real estate value are the homes people live in, which sums to $162 trillion. With around 2.5 billion households it is most closely tied to the fortunes of ordinary people.

The value of a residential real estate is distributed with the size of prosperous populations. Thus, China makes nearly a quarter of the total value, with nearly a fifth of the world’s population. The West takes up the biggest part with over a fifth or 21% of the world’s total residential asset value in North America although only 5% of the population lives there.

Mostly pronounced in commercial markets is the trend for western nations to dominate the real estate market, where nearly half of the total asset value resides in North America. Europe makes the charts with over a quarter while Asia and Australasia have 22% and only 5% left for South America, the Middle East, and Africa. However, the real estate market can be quite surprising which means there is room for alternative interpretations as well as unforeseen changes. Regardless of all predictions, there will always be some things that even the biggest professionals can’t calculate beforehand. What is to happen in 2017  we are yet to see.