McKinsey: 68% of Global Net Worth Is Held in Real Estate

A report by consulting firm McKinsey & Company shows that global net worth rose to US$514 trillion in 2020, up from US$156 trillion in 2000. The majority, or 68%, of global net worth was held in real estate last year.

The largest portion of real estate wealth was in land, at 35%. This was followed by residential real estate at 21% and non-residential buildings at 11%.

Meanwhile, 17% of wealth was held in fixed assets (excluding buildings and intangible assets). This included infrastructure (11%) and machinery and equipment (6%).

Furthermore, 8% of wealth was held in inventories. Non-produced assets (excluding land) accounted for 4%, comprising mineral and energy reserves and other non-produced assets, each at 2%.

Intangible assets such as intellectual property and patents accounted for 4%. Financial assets were not included in the calculation of global wealth as they are effectively offset by liabilities.

According to the McKinsey report, the surge in net worth over the past two decades has outpaced the increase in global gross domestic product (GDP). Global wealth has increased significantly due to rising property prices supported by lower interest rates.