Asian countries to potentially enter top real estate list

Asian countries India and Indonesia, along with Egypt, UAE, and Saudi Arabia were highlighted as strong contenders to climb the global real estate value ranks.

India may possibly rank up in the list of top countries by real estate value due to its growth potential, particularly relative to their population.

According to Paul Tostevin, Head of Savills World Research, India, who is currently in the 14th place, may join Japan and South Korea in the top 10 with the help of its demographics and the still developing residential and commercial markets.

“Given the underdeveloped nature of real estate in some locations, some countries do offer real good growth potential, particularly relative to their populations. I think the prime example here is India,” Tostevin said.

As of June 2023, India has surpassed China as the most populous country in the world with its population of 1.4 billion. However, China remains as the top country with the most valuable real estate.

“Because of the still developing nature of [India’s] residential and commercial markets, there's real potential there, particularly given a rising middle class and increasing development as manufacturing and services bases develop and drive that need for real estate,” he said.

Indonesia and Egypt, who are currently outside the top 30 countries by real estate value, may also move up the list due to its population growth. Two locations in the middle east, Saudi Arabia and United Arab Emirates, may also rank higher due to the mega projects that are currently being developed.

The global real estate market may see a notable 2.8 percent decrease in its value in 2022, but it is still the biggest store of global wealth in the world.

“Global GDP growth is forecast to slow further in 2024. Interest rates are elevated, global economic growth will remain weak and that will weigh on property markets,” Tostevin said, “Real estate continues to be the world's largest concentration of wealth in the world. It's worth more than global equities and debt combined.”

He said that they are waiting for commercial markets to adjust to the current cycle before the prices will start stabilizing and developing again by 2025.

He added that the decrease in worldwide real estate value is due to higher inflation and rising interest rates, which suppressed transactional activities. 

“We're also seeing a currency effect here, to get a total global value, we have to convert into US dollars,” Tostevin said, “While commercial real estate may have fallen last year, it's still up 14.4 percent over the three year period.”