How will Blockchain Technology Affect The Real Estate Industry?
Have you learned about the advantages of implementing blockchain technology in the real estate sector? Or do you still think traditional enterprises won’t be able to embrace this technology?
In fact, blockchain development trends have been increasing in the real estate sector over the past few years. There are countless developments and advantages to this technology. The scope is wide-ranging, encompassing everything from automating property administration and enhancing the security of sales and purchases to introducing more thoughtful decision-making.
As a result, blockchain has the potential to revolutionise and develop the commercial real estate industry. This article reveals the most significant real estate blockchain use cases as well as how your company may benefit from blockchain adoption before your rivals can.
You may benefit from Boardwalk’s vast knowledge in both real estate and blockchain. Learn more about our examples, such as Rently and Real Estate Association, to see how utilising this cutting-edge technology may help your business succeed.
- Why You Should Worry About Using Blockchain in Real Estate
- What Main Problems Blockchain Application Solves in Real Estate
- Lack of Transparency and Slow Operations
- Unsecure Titles or Data Management
- Slow and Unsafe Transactions
- Top 8 Blockchain Use Cases in the Real Estate Industry
- The Real Estate Tokenization
- Smart Contracts
- Security and Control Over Transactions
- Property Management Automation
- Transparent Data Tracking and Analysis
- Shared Ownership and Investment
- Access to Secondary Market Opportunities
- Global Asset Distribution
Why You Should Worry About Using Blockchain in Real Estate
It’s preferable to look at some data if you’re still unsure about the genuine impact that blockchain will have on the real estate market in the next few years. In this manner, the technology’s capabilities will become completely clear to you.
By 2030, the global blockchain market is expected to be valued at $403.36 billion, growing at a compound annual growth rate (CAGR) of 67.7% from 2023 to 2030.
However, blockchain investments don’t stop at that point. The IDC Worldwide Blockchain Spending Guide projects that, between 2020 and 2024, the amount spent globally on this innovation would increase by an average of 48% a year. It shows how quickly blockchain technology is being adopted around the world.
What Main Problems Blockchain Application Solves in Real Estate
Over the past few years, there has been a decline in the growth of the commercial real estate sector. It encountered a few issues that continue to be barriers to this market progress.
In addition, blockchain development contributes to the creation of solutions for these problems. Now let’s identify the major issues facing the real estate sector and how blockchain technology can assist in resolving them:
Lack of Transparency and Slow Operations
The complete lack of transparency amongst contractors is one of the main issues facing the real estate sector; it leads to fraud, corruption, and money laundering while also impeding the expansion of the sector.
However, shared secure databases represent one of the primary advantages of blockchain in real estate.
Realtors avoid treading on each other’s toes by having a common understanding of leasing, buying, and selling transaction records. Multiple listing services are a perfect illustration of why this new technology is so important; they aggregate property-level data from the private databases of brokers and agents.
The blockchain-enabled database can be used by numerous independent parties, but only by those who have the right to access it. Therefore, only contractors who work in the real estate management industry—such as owners, tenants, lenders, investors, operators, and other service providers—are able to consistently access and amend the necessary data quickly and reliably.
Unsecure Titles or Data Management
Insufficient record-keeping, which is essential for quick commercial procedures, is another real estate issue.
Blockchain provides digital IDs to all entities that are unchangeable and inappropriable. It results in more open record-keeping for loans, liens, and property titles. Thanks to this technology, title corporations can now be disintermediated via blockchain.
Slow and Unsafe Transactions
Conditional conditions, lengthy processing times, and safe transfers are common in real estate deals. Blockchain allows for a more efficient execution of the transaction as a result.
For instance, lender approvals or title clearances may be necessary for a purchase-sale transaction. Real estate organisations can use blockchain technology to verify whether the conditions have been met and the transactions have actually taken place.
The necessity for increased security and virus protection in real estate is another issue. Blockchain addresses that by offering data encryption with a better level of protection.
Top 8 Blockchain Use Cases in the Real Estate Industry
1. The Real Estate Tokenization
As of right now, we know that blockchain development offers solutions to the main problems facing the real estate industry, making previously unthinkable levels of connectedness and security possible across real estate enterprises.
However, let’s examine blockchain real estate use cases in greater detail and the commercial outcomes they bring:
2. Smart Contracts
Smart contracts can also be utilised with the blockchain in real estate.
Smart contracts are one of the most profitable blockchain technologies, and they are extremely helpful to the banking and finance sectors. With so many transactions to manage, the real estate sector might also gradually benefit from this technology.
With this kind of technology in place, a property transaction between a buyer and seller can now happen online instead of involving almost an infinite amount of paperwork. More security is available in the transaction than before.
3. Security and Control Over Transactions
Fraud risk can also be decreased in real estate using blockchain use cases. It’s possible that you are trying to buy property from someone, or that they are trying to buy it from you. Since you don’t know them, you have no reason to put your complete trust in them.
Blockchain technology makes that unnecessary. Blockchain removes the need for intermediaries in property transfers, making them free from any chance of dishonesty.
Up until this point, the real estate sector has required a great deal of documentation and the participation of numerous middlemen. As a result, financing and payment methods for real estate transactions have become cumbersome, costly, and opaque.
4. Property Management Automation
Blockchain technology will replace paper documents and the requirement for several software applications in the real estate industry. Blockchain technology will take the place of all things in order to improve and upgrade.
The entire property management process will be more effective with a single decentralised application that uses smart contracts supported by blockchain technology. It will result in lower expenses and less time spent on administrative work.
5. Transparent Data Tracking and Analysis
Blockchain uses persistent ledger technology, which operates for the duration of the network. As a result, all information about the land or the building’s past is documented, easily accessible, and open to all potential buyers and investors. Blockchain has the potential to improve equity for all parties engaged in real estate investing.
Furthermore, integrating big data and blockchain technology improves the possibility of tracing customer and owner histories more precisely across borders and banks. It decreases the likelihood of default. Players in the big data real estate market can now analyse data more effectively and make decisions based on facts.
6. Shared Ownership and Investment
Real estate is being transformed by blockchain technology, which makes fractional ownership and investment possible. Real estate purchases involve large financial outlays, particularly in light of the steadily rising cost of real estate. Investors can pool their funds and purchase a portion of a property via the blockchain that they would not be able to buy separately.
Moreover, investors with shared ownership can sell their ownership interest at any time. Additionally, it enables them to avoid handling the upkeep and leasing of real estate on their own, which frequently calls for a significant amount of work.
7. Access to Secondary Market Opportunities
By providing access to the secondary market, tokenizing real estate assets opens up options. It is made possible by the ability to digitally replicate any asset, reduce transaction costs, and make them available anywhere in the world.
You may attract more investors and convert illiquid assets into liquid ones by using blockchain in real estate. Consequently, anyone can purchase a digital asset or a portion of it and subsequently resell it on the secondary market.
8. Global Asset Distribution
When considering the global context, the majority of the previously discussed topics—such as tokenization of real estate, enhanced liquidity, smart contracts, and improved transaction transparency—become much more relevant. There are no limits on how blockchain can be used in real estate.
With the aid of technology, a global system for purchasing and selling real estate may be established, complete with instruments that buyers and sellers throughout the globe can easily comprehend. You will be able to automate every sales transaction and instantly verify its legitimacy with smart contracts.
Conclusion
Every year, blockchain technology in real estate will become more and more important. We advise you to put it into practice right now.
At Boardwalk India, we have a great deal of experience developing apps and real estate software of all kinds and complexity levels. Together with our expertise in creating custom blockchain applications, we can assist you in determining which functionality, progressive stack technologies, and user-friendly design will best serve your solution’s needs.
Please visit us at www.boardwalkindia.com for additional details.