BusinessDay

Real asset with highest investment globally

With 67 percent share of the global real asset investment, real estate ranks the top on the list by giant consulting firm McKinsey.

The closest to real estate was fixed asset with a share of 17 percent, 50percentage points gap between the value reported for the property market.

Inventories recorded 8 percent while intangibles and non-produced products recorded four percent each.

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According to the recent report by the advisory firm, three major components drove the expansion in global net worth: the real estate boom and valuation gain common to all countries except Japan; rising values of and investment in corporate assets, especially in China and Mexico; and growth in net financial assets among net exporters, those with consistent current account surpluses (in other words, accumulating net asset positions).

“Real estate fueled at least 50 percent of net worth expansion relative to GDP in all countries other than China and Japan,’ it said.

The most significant growth in real estate stock was in Australia, Canada, France, Sweden, and the United Kingdom (China saw the greatest home price growth but also had significant GDP growth, and as a result had more muted growth of real estate in relation to GDP), analyzed from McKinsey’s report.

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