How’s the property market trending? Is it the right time to buy? Is the market telling me to sell? How much will my home be worth in 20 years?
Real estate has always been a sector where trends are important. Identifying blockchain trends in the real estate sector can be as tricky as pinning down the real estate market itself. But experts have some consensus on where blockchain-powered real estate platforms are heading.
Tokenizing properties is hot. Innovators are probing ways to bring real estate investments to the blockchain so they can be traded more easily. Establishing real property as a digital asset enhances liquidity. This tokenization could also help buyers purchase a home one piece at a time, a concept known as fractional ownership.
Blockchain platforms will decrease the number of players in the lending and securitization corners of the industry. Replacing administrators with this technology wherever possible will reduce costs, decrease risk, and improve liquidity.
These are the upcoming blockchain developments for real estate that experts see looming on the horizon.
1. Jonathan Chou, CEO and Co-founder of Bee Token
“The number one trend of blockchain and real estate is liquidity. Whether that's in fractional ownership and being able to buy and sell a portion of homes immediately as opposed to a complicated process. Another way is the liquidity of being able to rent your home out whether short term or long term after purchase. This can be a consistent revenue stream and being able to make the process seamless between purchase to renting out is important.”
2. Perrin Quarshie, CEO and Founder at RealBlocks
“Tokenization seems to be the trend that will most influence blockchain in real estate. In short, tokenization is the process of representing the ownership of real world assets digitally on a blockchain. The most powerful and impactful application here is the ability to create an ecosystem in which investors can seamlessly trade their digital ownership with one another. In doing so, the technology can provide investors with a level of liquidity and financial access that previously has not been achieved in the real estate market.”
3. Mike Cagney, CEO and Co-founder of Figure
“In the near term, we believe it’s attacking the rent-seeking and inefficiencies endemic to lending and securitization. It’s a massive market burdened with custody, trustee and/or administrative functions that are not accretive to the asset originator or investor. It also often suffers from illiquidity, opaqueness, additional cost and risk. Non-securitized loans have no formal trading platform, and trades can take up to 100 days or more to settle. Securitization is burdened with audit, underwriting and trustee fees. We are right in the middle of this and already demonstrating the power blockchain technology has to transform it.”
4. Mike Liddell, CEO of AssetBlock
“Investment opportunities will become available this year in a meaningful way and the value of tokenization will be proven. The widespread adoption of new technology and prevalence of crypto generally will contribute to making it more accepted across all channels. With a reduction in volatility in the blockchain space, more capital will begin to flow and there will be a higher standard for investment in crypto related projects.”
5. John Kang, Co-founder and CEO of Reasi
“We will see successful payment-related blockchain projects in leasing, transactions, crowdfunding, among others. Blockchain technology originated around financial innovation, and its greatest potential remains in fintech. Being able to send money (value) without using a bank still blows my mind, and the financial savings through blockchain automation will be hard to ignore. While mainstream cryptocurrency-adoption is years away, payment facilitation via smart contracts is already here.”
6. Itzik Spitzen, CTO and Co-founder of LeasePilot
“While blockchain can create transparency, those applications will take time to mature because the industry is traditionally very conservative and not readily comfortable sharing their data. I expect we will see blockchain implementation on two fronts: publishing information that is already publicly available but in a trusted way which can create organization consensus, and zero-knowledge proof implementation which are taking advantage of blockchain’s trust feature without revealing any information.”
7. Ali Tumbi, Founder of Global REIT
“I believe we will continue seeing greater adoption of blockchain for the tokenization of real estate assets. This is where a single asset is broken up into several parts, or tokens, which are then sold to the market.
This allows a greater pool of investors to enter the market, who were previously not comfortable with the high initial costs of owning property.
This also increases the liquidity of real estate, as individual tokens are more likely easier to buy and sell when compared with a whole single property.”
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