The insatiable appetite for home buying last year saw the world’s real estate assets – the world’s largest store of wealth – jump 5% in value to an all-time high in 2020, according to a released report Wednesday by Savills.
Last year’s price appreciation left the total volume of global real estate assets at $ 326.5 trillion, a figure higher than all global stocks and debt securities combined, and worth nearly four times global GDP, the real estate agency said.
“Government revival in the aftermath of Covid-19 means there is a lot of capital in general, and real estate is seen as a safe store as global investors seek income in an interest rate environment low, ”Paul Tostevin, director of the Savills Global Research Team, said in the report.
“While the annual growth of the capital value of real estate of 5% in 2020 is lower than that observed for securitized debt, stocks and gold, at 17%, 20% and 29% respectively, it is is the additional income component of the property that makes it a compelling purchase for many buyers, ”he added.
The gains were driven by the residential real estate sector – which accounts for 79% of all global real estate value – a market that has thrived amid the pandemic as homeowners rush to larger homes better suited to work at home and locked up.
The sector saw its value increase by 8% last year to $ 258.5 trillion, driven in particular by activity in China.
China is home to 30% of the world’s residential wealth, and the segment saw gains of 13% in 2020, driven by “strong price growth coupled with the delivery of new supply,” Savills said.
After China, the United States accounts for 11% of the world’s residential wealth, and the two countries with Japan, Germany, the United Kingdom, France, South Korea, Canada, Italy and the Australia, represent 75% of the global residential total.
The value of global commercial real estate, meanwhile, fell 5% in 2020 to $ 32.6 trillion, and is expected to rebound in 2021 and reach a new high by the end of the year.