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Considering the global economy, the historical association between net worth and the growth of wealth and the economic flow value like GDP is no longer valid. As per a new study based on a fundamental tool like the balance sheet, real estate continues to be one of the best investment avenues to store wealth.
Net worth refers to the store of value, determining wealth and supporting income generation in the future. Considering the consolidation at the global level, net worth is the same as the value of real assets. The reason is that every financial asset is matched using corresponding liabilities; this makes them net out.
The researcher examined the global economy after several years of turbulence, particularly the financial crisis of 2008. Then the pandemic affected the global economy, but still real estate happens to be one of the best investment avenues.
Currently, a greater number of economies are turning intangible due to digitization. However, the brick and mortar infrastructure accounts for 68% of the assets. Out of this, land constitutes around 35% of the assets. Another 33% is constituted by non-residential properties. Besides, the last couple of decades have witnessed an expansion of balance sheets. The economic growth in India has also been slow. Although digitization has gained priority, intangible properties account for just 4% of the net worth. Inventories account for 8% out of this.
A significant number of investors have been finding it difficult to get good economic returns. On the other hand, traditional asset classes like real estate continue to deliver returns. This explains why an increasing number of investors in India are going for real estate properties in different cities.
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