One of the most contentious argument in deriving Net Worth and skew most of our calculation is the Property and Loan, simply is the biggest ticket item for most people.
Let's use a scenario to prick the logic. If a multi-millionaire has a 5 Million apartment and has a monthly balance of zero after loan and spending whereas a 5K salary man owning a HDB with also outstanding loan has a saving of 100K. Does it make sense to say the HDB man has higher networth than a man who has a 5 Million apartment who has zero saving ?
The best way to know is not whether we need to service the loan or not. Or who has higher saving. To know net positive or negative, I would get the market value of the property and minus all the outstanding loans. Property Market value may change, so does your Net Worth. We are just reflecting Reality of it. That's the whole idea.
An asset is an asset. Net Worth is not about creating buffer, safety zone, principle, financial planning, living standard or whatsoever. It is what it is.