Quantum Wealth Summary
- Residential real estate is the largest store of global wealth.
- Housing markets are bottoming out. Will there be an upswing or a greater correction to come?
- How can investors capture upside and a margin of safety?
- We look at 2 opportunities positioned to make money in housing.
- And we update you on the Top 5 Quantum Trends we’re seeing this week.
So, you’re an investor looking to build wealth?
A logical starting question for you is this: ‘Where is the world’s biggest investable repository of wealth?’
And the answer, at least today, is real estate.
In particular, residential real estate:
Source: Savills Research, 2020
Around 30% of the $258 trillion in global residential real estate is based in China. And a further 11% in the US.
It wasn’t always this way. Household real estate, primarily housing, has become the world’s largest store of wealth due to its growth over the past two decades:
- In China, house prices grew around 450% between 2000 and 2020.
- In the US, around 220%.
- In New Zealand, around 400%.
Further and more rapid growth (especially in New Zealand) was seen in 2021, before this supercycle seemed to come to an abrupt end.
In comparison, the S&P 500 grew around 260% between 2000 and 2020. The NZX 50 grew over 600% (since 2003).
Yet it’s also a source of surprise to see housing — a largely non-productive asset, since most people just live in their homes — grow at a similar rate to listed, productive businesses.
Now property is going backwards as higher interest rates kick in. I came across a real estate agency only doing 30% of the business it used to do. And this is just the start of a painful correction. Or the plummet that marks the end of the two-decade-plus supercycle.
Here are some critical observations on where property markets will go next. How you could actually invest in real estate more productively. And use this opportunity and timing to position for great profits…
Simon is the Chief Executive Officer and Publisher at Wealth Morning. He has been investing in the markets since he was 17. He recently spent a couple of years working in the hedge-fund industry in Europe. Before this, he owned an award-winning professional-services business and online-learning company in Auckland for 20 years. He has completed the Certificate in Discretionary Investment Management from the Personal Finance Society (UK), has written a bestselling book, and manages global share portfolios.