Net worth tripled between 2000 and 2020 to $510 trillion, or 6.1 times global GDP, with China accounting for a third of global growth. Households are the final owners of 95% of net worth, half in the form of real assets, mostly housing, and the rest in financial assets such as equity, deposits, and pension funds. Net worth per capita ranged from $46,000 in Mexico to $351,000 in Australia. In China and the United States, the top 10% of households owned two-thirds of wealth.

This has raised questions about whether societies store their wealth productively. The value of residential real estate amounted to almost half of global net worth in 2020, while corporate and government buildings and land accounted for an additional 20%. Assets that drive much of economic growth — infrastructure, industrial structures, machinery and equipment, intangibles — as well as inventories and mineral reserves make up the rest.

The Case in India

“That certainly is not happening here in India,” says Rohit Sarin, co-founder of Delhi-based multi family offices firm, Client Associates.

Experts say that Indian money – a lot of it new age and retail — is deflecting from real estate, attracted more to asset-light tech businesses. This is a distinct divergence from the findings of the McKinsey report focused on our western counterparts.

“In India the incremental flows of real estate are decreasing,” says Sarin, “in fact people are disinvesting, or buying homes they can live in.” He says if they do sell, they are monetising and acquiring more wealth and assets for self-use and not for storing their wealth.

“In continental Europe, real estate is preferred because for them protection is a bigger goal than growth. Whereas in the U.S., growth is more important than protection and equities provide more growth than any other asset, even real estate,” says Sarin.

money flow

Real estate most preferred store of wealth; digital only 4%