Is blockchain ready to disrupt real estate?
Real estate remains the world’s largest accumulation of wealth. According to Savills, one of the world’s largest real estate services providers, more than $258tn is locked up in residential properties. With another $32tn in commercial properties, these two alone outweigh the combined value of all global equities and debt securities by as much as $23tn!
In the US, some 7 million homes change hands every year. On the other hand, NASDAQ alone executes over 30 million transactions every day. This difference in number of transactions clearly shows how illiquid real estate is and how much room there is for accelerating this entire process.
One of the key reasons why real estate transactions take time, after buyers and sellers agree on prices, is everything around the actual transaction. There are numerous check ups to be made, if a bank is involved with a mortgage another set of eyes and hands need to check everything so the actual transactions can last for weeks if not months. All cash transactions, seemingly simple, are also taking weeks in the best case scenario.
Why is the stock market so much “faster” than the real estate market?
On the stock market, all buyers and sellers are pre-screened, approved for engaging in transactions and stocks traded have clear properties. What changes in the background are performances of companies, but actual confirmations of ownership (tokens, anyone) are constant and predetermined.
What if someone could do the same for real estate transactions? Blockchain technology, paired with digitization of processes, identify verifications and integration of third party services such as title insurance companies, notaries, inspections and valuation service providers could be the key to increasing speed of transactions without sacrificing security. Application of blockchain solutions as process drivers for real estate transactions is possibly the market disruption that everyone is looking forward to.
At Immobilium that is exactly where we started from. Asking ourselves question: what would it take to allow almost instant (talking minutes instead of weeks) real estate transaction. It appeared that smartly designed blockchain solution, combined with utility and governance token could do the job.
Get in touch to learn more or read the $IMB whitepaper first. Watch this space for more news as we create global, decentralized, real estate trading and investment platform – info.immobilium.io