At a compound annual growth rate (CAGR) of 10.5%, the global real estate market is forecast to grow from $3386.11 billion in 2021 to $3741.06 billion in 2022.
The growth is primarily the result of companies restructuring their operations and recovering from the impact of COVID-19, which had previously led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that led to operational challenges. In 2026, the market is expected to reach $5388.87 billion at a CAGR of 9.6%.
In which market is real estate growing the fastest and largest? Is the market related to the overall economy, demography, and other markets of a similar nature? How will the market evolve?
Main companies in the real estate market include Mitsui Fudosan Co. Ltd., Daito Trust Construction Co. Ltd., Brookfield Asset Management, American Tower Corporation, Sun Hung Kai Properties Limited, CapitaLand Limited, Realogy Holdings Corp., Xiamen C&D, Simon Property Group Inc. and Berkshire Hathaway Inc.
The real estate market consists of sales of real estate services by entities (organizations, sole traders, and partnerships) that rent, lease, and allow the use of buildings and/or land. The industry also includes managing real estate for others, selling, renting, buying real estate for others, and appraising real estate. The real estate market is segmented into real estate rental and real estate agency and brokerage.
“The key to real estate is rental, real estate agency, and brokerage.”
Renting real estate, also referred to as hiring or letting, is a contract in which a fee is paid in exchange for the temporary use of a good, service, or property that belongs to someone else. The different modes include online, and offline and involve various property types such as fully furnished, semi-furnished, and unfurnished.
The real estate market’s growth will be supported by stable economic growth forecasted in many developed and developing countries. The International Monetary Fund (IMF) predicts that the global real GDP growth will be 3.6% from 2021 to 2023 but that can change at any time.
Recovering commodity prices, after a significant decline in the historic period is further expected to aid the market growth. Developed economies are also expected to register stable growth during the forecast period. Additionally, emerging markets are expected to continue to grow slightly faster than the developed markets in the forecast period.
The outbreak of Coronavirus disease (COVID-19) has acted as a massive restraint on the real estate market in 2021, as the need for services offered by these establishments declined due to lockdowns imposed by governments globally.
It is expected that the real estate market will recover from the shock across the forecast period as it is a ‘black swan event and not related to ongoing or fundamental weaknesses in the market or the global economy.
The Asia Pacific was the largest region in the real estate market in 2021. North America was the second-largest region in the real estate market. The areas covered in this sector are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.
Countries covered in the real estate market are Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Italy, Japan, Malaysia, Mexico, Netherlands, New Zealand, Nigeria, Norway, Peru, Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Turkey, UAE, UK, USA, Venezuela, and Vietnam.
By Orlando J. Gutiérrez