Real estate is one of the strongest assets of today’s time. Slowly commercial enterprises and real estate professionals are recognizing the positive impact of blockchain in real estate.

As per the research, the technology underlying the well-known cryptocurrencies can alter the entire real estate market by leaps and bounds. The size of the professionally managed global real estate investment market grew from $7.4 trillion in 2016 to $8.5 trillion in 2017, according to an MSCI analysis.

However, today’s real estate market comprises numerous segmented and autonomous networks with transactional friction and system opacity. Well, there are numerous benefits of blockchain in real estate that business owners should know before integrating the technology into their system.

 

Revealing The Impact of Blockchain on Real Estate

Blockchain, still the most popular technology of today’s time, fails to build trust among many business owners. They still wonder if blockchain is profitable in real estate or not. So, we have come up with proof stating the benefits of blockchain in commercial real estate.

• Businesses from various industries spent around $6.6 billion in 2021 to integrate blockchain technology into their operations. If we compare it with 2020, the profit is 50% more.
• Blockchain experts predict that global spending on blockchain in real estate will grow by an average of 48%
• Statista reports state that worldwide spending on blockchain solutions is expected to grow from $4.5 billion in 2020 to $1.9 billion by 2024.

These statistical market facts reflect the ever-growing demand for blockchain in real estate. Now that we are well-versed in the importance of blockchain in today’s time, let’s move to the challenges faced by the real estate industry and how blockchain is overcoming them while offering tremendous benefits of blockchain real estate app development.

 

 

5 Challenges Faced By The Real Estate Sector

The economic fluctuation and the ongoing trends in the real estate industry introduce new challenges now and then. When it comes to real estate, different factors impact the business revenue, and as a result, realtors have to go through multiple challenges, as discussed below. In the end, they search for the cost to hire a blockchain developer as businesses require professional assistance.

 

1. Lot of Paperwork

Every transaction in the conventional real estate market entails a long list of time-consuming and tedious paperwork. As a result, real estate businesses frequently lose money and potential clients while also becoming side-tracked from their primary objective. To resolve this problem, blockchain technology proved to be a useful asset.

While integrating blockchain in real estate, businesses can say goodbye to the tedious paperwork and adopt a modern way to keep the documents smartly and securely.

 

2. Lack of Transparency

Real estate is not for everyone because of the involvement of multiple factors like cash demand, credit score, citizenship, and accreditation. Also, there is no additional database to access the information required to make the buy and sell decisions. Traditional methods do not maintain work transparency and hence affect business decisions.

But, this problem has been resolved greatly after the implementation of blockchain in real estate. Now, businesses can experience a transparent work process while availing the perks of advanced technology.

 

3. Multiple Intermediaries

We all know that the real estate sector involves a lot of intermediaries as business owners have to deal with multiple things in a day. This further affects the business process greatly. For instance, two parties are involved in the real estate business, so they have to involve a third party somehow to get the work done. But, in the case of blockchain, things aren’t the same.

There are no intermediaries involved while integrating blockchain in real estate. Technology advancement has greatly resolved one of the major challenges that many realtors faced before the invention of blockchain development.

 

Benefits of Blockchain in the Healthcare Industry

 

4. Lower Transaction Speed

There is no denying that real estate processes suffer from poor transaction speed because of the involvement of multiple intermediaries. As per the survey, around 44% of travelers fix an appointment with real estate agents before going abroad. It reduced the speed of the real estate process, which further lowered the transaction rate greatly.

So, in that place, if we add blockchain technology into the real estate system, the transaction speed will become 2x times faster.

 

5. Expensive Project Investment

Finally, coming to the last yet the major issue faced by the relators, i.e., budget. An offline business process involves a wider number of intermediaries like broker fees, attorney fees, exchange fees, etc., making the process costlier.

So, if you want to avoid such unwanted expenses, switching to the technology as soon as possible is advisable, as the blockchain development cost is less than that of others.

These are some major challenges of blockchain in real estate faced by business professionals in previous times. Now that you know the problems and how blockchain has overcome those challenges quickly, incorporate it into your real estate business. Also, we have discussed the benefits of blockchain in real estate below.

 

What Are The Major Benefits of Blockchain in Real Estate?

Real estate platforms connect buyers and sellers on a single platform. Hence, the process involves a lot of physical interactions, transactions, and more while increasing the chances of real estate fraud and scams. Even the financial crisis report of 2008 states that the bloated real estate industry leads to tragic consequences.

 

 

To overcome such major problems, blockchain acts as a savior. It not only help the real estate sector avoid fraud and attacks but also benefits business long-term. So, let’s reveal some of the amazing benefits of blockchain in real estate.

1. Tokenization

The commercial real estate process involves converting real estate assets into digital tokens further traded on smart contract platforms. A property’s specifics are recorded in a smart contract as digital tokens. The property is transferred after the requirements are met.

The bare minimum of human interaction occurs when real estate is tokenized. The process requires ICO token development or NFT tokens to secure the system from fraudulent activity. Due to fractional ownership, real estate tokenization can be useful as it enables numerous investors to participate in one property. Thanks to smart contracts, reduced transaction costs are another benefit of tokenized real estate.

2. Better Data Accessibility & Transparency

Lack of data access and zero work transparency leads to scams in real estate. The negative impact of this scenario was reflected during the 2008 financial crisis when the financial industry failed to survive the effect of the bloated valuation.

To resolve this major problem, decentralized blockchain networks helped to enable work transparency and data accessibility in the real estate sector.

While availing of Decentralized app development services, businesses can resolve such problems and avail the significant benefits of blockchain in real estate. The technology facilitates high-level work transparency and generates trust for investors. Blockchain-powered real estate investments are much more secure than regular ones.

3. Zero Intermediaries

While using smart contracts, businesses can prepare agreements in just a few lines of code, making the process more efficient. The real estate business involves a lot of intermediaries such as lawyers, financial institutions, advisors, realtors, etc., which delay the process flow from the buyers to the sellers.

After integrating blockchain in real estate, businesses can cut down intermediaries while making the process seamless. The blockchain-based real estate website development cost is also less than other development types. As there will be zero intermediaries, blockchain technology makes the process swifter and more efficient.

 

Develop A Crypto Payment Gateway

 

4. Reduced Business Risks & Cost

Reduced risk to potential investors is one of the biggest benefits of the blockchain. As the property’s value is liquidated, investors can buy and sell investment tokens in real-time. To reduce the risk for all parties involved, a blockchain-based smart contract system reduces tampering risks and data manipulation.

As blockchain-based real estate transactions are secured and in compliance with international real estate practices, there will be less blockchain development cost and lower risk. On the other hand, buyers and sellers also get a better value for their real estate investment as they reduce the costs associated while managing real estate investment opportunities.

5. Strong Security

Security is another major benefit blockchain offers to all industries. Considering the sensitive data being passed on in the real estate sector, business owners must keep stronger security which can be possible while integrating blockchain technology. It is designed to keep the system secure while preventing businesses from cyber attacks.

Since all the data and sensitive information are stored in blocks and linked to a distributed ledger, businesses can remain assured of safety and security. It is the major reason why businesses prefer blockchain mobile app development for any business solution.

6. Offers Liquidity

Because there aren’t always buyers or sellers accessible, the real estate market is seen as being illiquid. A tailored percentage of your home’s equity might be released as tokens and placed on a market to be sold among investors, eliminating the need to sell equity to a bank.

Also, liquidity in cryptocurrency and blockchain provides price stability and less volatility, which proves advantageous for real estate business owners. So, businesses that go for blockchain development can set themselves to avail benefits for years to come.

7. Fractional Ownership

Real estate tokenization lessens entry barriers for real estate owners and investors while granting access to the funds. ICO tokens have made it easier to invest a large sum of money in a single investment. Buyers can now engage in fractional ownership thanks to ICO or ERC20 token development.

For instance, five tokens stand in for the equitable stake in an apartment complex; purchasing each token would result in the transfer of full asset ownership. As per the real estate app development company, if a buyer simply purchased two tokens, they would only own a two-fifths equity interest in the asset.

Blockchain technology is one of the best ways for investors to invest in real estate. As the technology is advancing into Metaverse, cryptocurrency development, blockchain development, and more, now is the right time to implement blockchain in real estate.

Final Thoughts!

Blockchain has plenty of business opportunities to improve the trust and efficiency of the real estate sector, as clearly reflected in this blog. So, we can say that the coming time will be an interesting time to watch how things unfold. While most businesses have already incorporated blockchain in real estate, you can also be a part of the competition by taking a step ahead.

Get in touch with a leading blockchain app development company, or hire a blockchain developer to help you incorporate the latest tools and technologies correctly.

Frequently Asked Questions