Even during the current economic climate, global real estate is proliferating. Despite all the volatility and uncertainty, this global market is estimated to reach a revenue of over $4 trillion by the year 2025. Economic development in developing countries, the rising increase in demand for real estate housing, and several other factors have steadily contributed to increased market revenue.

The rapid increase in rural-urban migration, which led to migration, played an integral part in driving the market’s growth. This development spiked the demand for urban home spaces, causing an upsurge in the real estate housing investment. Investments in the global commercial retail market are also making billions of dollars, with real estate investors actively exploring various countries to invest in.

The complexity of the real estate market must be disrupted

While the real estate market and its revenue have been dramatically increasing, it is still plagued with several limitations hindering it from reaching its maximum potential. Barriers are keeping investors, particularly foreign ones, from purchasing real estate properties in different countries. Foreign investors have to go through rigorous processes depending on what country or region they choose to invest in. These investors must go through agencies to purchase these properties, but these purchases come at huge costs as agencies have fees for their services.

Investing also requires massive capital in buying properties abroad and has to be held down for several months depending on country laws before realizing returns from the investment. Because of this, many small investors who have no access to substantial capital have been discouraged from investing. The liquidity in the market also poses a significant barrier and should be effectively addressed for adequate growth to occur in the market.

Transforming the current landscape of real estate buying with feasible solutions and technologies

Over the past few years, blockchain technology has disrupted several sectors and industries by totally revamping traditional business processes. The distributed ledger technology is designed to facilitate transparency, authenticity, security, and decentralization. Since it has been used to leverage certain sectors, including financial, luxury, gaming, and health, it’s time for the real estate sector to take advantage of this innovative technology and explore various ways how it can facilitate the market.

However, some blockchain companies have already begun such explorations. For example, LABS Group has leveraged this technology and created a digital representation of real estate properties on the blockchain, which will allow easy access and trading. Foreigners will no longer need to go through the complex processes when purchasing assets abroad because LABS Property will act as title deed custodian locally. Investors can then purchase directly from their platform. This eliminates the tedious paperwork process and middlemen challenges.

With its Chairman as Mahesh Harilela, from the famous Harilela family of Hong Kong. The Harilela family has a long legacy and is dubbed one of the most affluent Indian families in Hong Kong. It runs businesses ranging from hotel empire and real estate investment to import and export trading. The company has raised $6 million from a dozen strategic investors, such as PLUTUS.vc, Elevate Ventures, Genesis Block Ventures, YBB Foundation.

Democratizing access to real estate investments

With the decentralized framework, investors can now purchase real estate properties in fractional—fractional ownership. This will be similar to owning a square foot of a property. Investors will not need to acquire tremendous amounts of capital for single ownership; instead, they can purchase via the LABS Group platform—a property swap market—using minimal money. On the platform, properties can be bought and traded depending on the investors.

For example, suppose an investor is willing to invest in real estate property in Vancouver but has no access to huge capital funding and does not desire to go through the documentation, requirements, and agencies to secure the property. In that case, all they need to do is purchase one via LABS Group. Since the company will digitally represent the property on the blockchain, the investor can choose to buy a fraction of the property they can afford, and it automatically becomes theirs. The same fraction purchased can be traded with other interested buyers on the blockchain, and earnings will be received almost instantly.

Fractional ownership of properties can cause a significant boost to the real estate market as small investors will now have access to real estate investments without restrictions of needing colossal capital. Fractional ownership also means investors don’t have to wait for months or years to earn returns; they can trade and transfer rights on the blockchain platform.

Blockchain technology has proven its capacity in assisting effective growth in the real estate sector by making it possible to represent properties on the platform digitally; trading real estate properties will happen seamlessly without geographical restrictions. This innovative technology also created an opportunity for small investors to participate in the market, which positively can impact the overall revenue in the market.

Developments in real estate technologies

Blockchain technology is undoubtedly creating a new future for business operations while giving all players equity and fairness. With the latest developments the technology brings to the market, retail investors will have unrestricted access to real estate investments. The exciting factor here is investors can purchase real estate properties in foreign countries as if they were local citizens. No complex documentation processes, no middlemen or agency hassles, all investments are direct, thanks to blockchain technology.

Properties can also be bought in fractions, allowing entry for small-scale investors, which can boost the market’s growth and revenue, redefining real estate ownership. The disruption of the market by blockchain stands to increase investments and open more opportunities to potential investors. Blockchain is redefining and democratizing the real estate sector for the better.

TechNode Global publishes contributions relevant to entrepreneurship and innovation. You may submit your own original or published contributions subject to editorial discretion.

Featured image credits: Unsplash