China could overtake the United States in terms of the world’s most valuable property market as soon as next year, a new report has found.
In its Global Built Asset Wealth Index Report, built asset consultancy EC Harris and London-based Centre for Economic and Business Research put the combined value of all built assets (residential, commercial and civil infrastructure as well as plant and machinery) across 30 nations representing 82 per cent of global GDP at a whopping $US193 trillion in 2012.
While the United States ($US39.7 trillion) ranked as the world’s most asset-rich nation, the report says China ($US35.4 trillion) is gaining ground and could overtake America by as early as 2014.
What’s more, by 2022, China is expected to have amassed $75.7 trillion in assets – more than one and a half times the $47.4 trillion in assets expected to be held within the US at that time.
With $3.28 billion as at 2012, Australia ranks 16th in overall built asset wealth and is expected to rank 15th by 2022 with asset values of $4.59 billion.
More broadly, the report highlights how building and infrastructure values in emerging economies are set to outstrip those in struggling developed nations in regions such as Western Europe.
Whereas built asset values in Asia and Africa are set to grow by 62.9 per cent and 63 per cent between now and 2022 respectively, those across the UK and Europe are set to rise by just 2.7 per cent over this time.
EC Harris head of strategic research Simon Rawlings says the report highlights differing economic prospects across regions and a transfer of wealth toward emerging economies.
“In a world where the balance of economic power is shifting, we see countries in the East with large cash reserves investing in their built environment at an unprecedented rate, whereas countries in the West have an ageing built environment, but little cash to update it,” he says.
“This has far-reaching consequences for the balance of both economic and political power as emerging economies continue to bridge the gap in accumulated wealth.”
While China is set to become the wealthiest nation overall, Singapore is the richest nation per person, with its citizens averaging built wealth of $US 156,000.
Having become the world's largest construction market in 2010, China, along with India and the US, is expected to drive construction growth over the next decade.