Blockchain, including digital tokens, are revolutionizing many aspects of the real estate market.
It was only a matter of time before two industries that have seen similar booms in many regions, would come together. Although the real estate industry is traditionally slow to adopt emerging technologies, it seems that even this sector can’t resist the hypnotic pull from Blockchain and the wider cryptocurrency market.
Dmitry Faller, CEO of Primalbase, a shared office space Blockchain platform, tends to agree:
“Real Estate is a conservative and a traditional industry, and thus it is ready for disruption, and Blockchain needs real use-cases that are not just based on speculation.”
Buying and selling
A couple of weeks ago it was revealed that a partnership between The Knox Group, BitPay and a British baroness will offer up luxury Dubai apartments in exchange for Bitcoins in a deal worth $330 mln.
Small-scale Bitcoin-for-property transactions have been done before. A London property company is offering to accept down payments in Bitcoin, and a Miami based investor has been looking to sell his $6.5 mln mansion for Bitcoin, but not of this magnitude.
And just yesterday the first house purchase in Bitcoin was reported in Texas.
All this means that mainstream developers have a high level of confidence in the disruptive potential of the technology.
Julian Svirsky, CEO of ATLANT:
“We foresee unprecedented opportunities for disruption in the global real estate and lodging markets that will allow investors, lodging guests and property owners to benefit in many ways, providing cost-savings and convenience, compared to the currently inefficient and expensive options.”
Renting
The same London based property company will be accepting rental payments from its tenants in the form of Bitcoin by the end of the year.
In Switzerland, Vision Apartments, a serviced apartment provider, has been accepting rent payments in Bitcoin and continues to experiment, stating that:
“Exploring the different Blockchains, especially Ethereum, has shown us the numerous possibilities there are to offer new and innovative services to our clients.”
David Drake, member of LAToken’s Advisory Board:
“The secondary and primary markets of fractional ownership of home equity and mortgages are now on the verge of a breakthrough, thanks to cryptocurrency Blockchain smart contracts.”
Land Registry
In a recently completed pilot, Chicago’s Cook County Recorder of Deeds tested the transferring of real estate ownership on a Blockchain platform and how this would be conveyed into the public record. The test was successful and met all the procedural and legal requirements. The report states:
“Though Blockchain can make transacting real estate simpler, safer, more accurate and easier to understand, there are challenges facing its adoption. In many cases, these challenges are the very reasons why such a new structure should be adopted, and thus can also be looked at as opportunities.”
Sweden’s land registry authority (Lantmäteriet) has been recording property and land on a private Blockchain since 2016, in an initiative that is set to save taxpayers more than €100 mln ($120 mln). The Bitcoin Blockchain has also been used in Brazil to help the government resolve ownership disputes in transparent and fair manner.
Blockchain’s power to revolutionize the real estate industry lies in its ability to speed up the closing process, increase transparency and reduce costs in every part of the transaction cycle.
Ragnar Lifthrasir, founder of the International Blockchain Real Estate Association (IBREA) says:
“Like any emerging technology, Blockchain will reach mainstream adoption when entrepreneurs create secure, easy to use applications that solve a problem. Real estate owners and businesses who adopt Blockchain earlier will experience the biggest benefit and will set themselves apart as leaders for the next revolution in the property industry.”