Every year, the Foundation for International Blockchain and Real Estate Expertise compiles a Global Industry Report – a compilation of research focused current business trends at the intersection of blockchain technology and the real estate industry. This report provides invaluable insight into the current status of Proptech, CREtech, Greentech, Fintech and Decentralized Finance companies working to create efficiencies and new ways of developing, investing in, building and transacting in the real estate world.
Click here to read the full report > https://fibree.org/wp-content/uploads/2022/06/FIBREE-Industry-Report-2022-EN.pdf
Blockchain technology has evolved in tandem with other advancements and trends in commercial and residential real estate like fractionalized investing, tokenization of real estate assets and crowdfunding. Given the historically opaque, lengthy and complex nature of real estate transactions, and the growing demand for transparency and elimination of third parties (disintermediation), it makes sense that blockchain would eventually serve as a supportive technology for all kinds of real estate transactions.
From the invention of smart contracts to the first homes sold as NFTs, the evolution of the relationship between blockchain and real estate is really interesting!
As blockchain becomes more widely adopted across the real estate space, this tech will transform the industry by streamlining unwieldly and outdated processes, dramatically reducing the prospect of fraud and eliminating all of the now unnecessary third parties who all take a piece of the pie (charging for services such as legal, title, appraisal, etc.) on every transaction, which ultimately causes inefficiencies, extended delays, additional costs for all parties to the transaction and other now unnecessary pain-points to any real estate deal.
Over the last five years, a growing number of property investors, owners and buyers have expressed interest in blockchain as a solution to all of these aforementioned issues. At the same time, real estate agents, brokers, lenders and other real estate professionals are exploring hundreds of different blockchain applications around the world.
Through the utilization of smart contracts, we limit the need for third parties, as blockchain technology enables a time and cost-efficient peer-to-peer transaction process. It’s distributed ledger technology provides security, transparency and immutability – all very important aspects of a real estate investment, acquisition or purchase.
Blockchain also supports fractional ownership through the
tokenization of property assets — another fast-growing trend in real estate
investment. This opens any local real
estate asset or market to a large pool of global investors through 24/7
secondary markets, who were previously would have been unable to engage with a
given real estate opportunity due to lack of market information, connections or
investment liquidity.
By tokenizing real estate, property owners and developers make a once
expensive, illiquid asset incredibly easy and cost-effective to buy or sell. The system itself is also flexible - users
can achieve varying degrees of security and transparency by choosing between
public, private and permissioned blockchains for their unique needs.
Proponents of blockchain technology in the real estate industry like myself argue that blockchain will enable every type of real estate transaction in a secure, immutable way. From buying an entire office building to collecting rent payments, and from securing a home loan to establishing ownership of a real estate asset, each transaction in the real estate sector will be recorded on blockchain, providing unprecedented transparency, equity liquidity, and disintermediation (dramatically reduced transaction time and cost).
Some market participants express concern over privacy, anonymity and security. Others worry about the jobs that could be lost as buyers and sellers rely less on real estate companies and other third parties, to automated smart contracts. Still others point to how energy-intensive it can be to validate new blocks of data in a public blockchain. While some of these concerns are well-founded, the benefits of blockchain as a transformative technology in the real estate industry cannot be overstated.
Regardless of the advocates’ or contrarians’ perspectives, blockchain has already made a revolutionary impact on the real estate industry. Today, investors are buying virtual plots of land in the metaverse, investing in real world class-A commercial property via tokenization, crowdfunding new commercial development through digital assets, securing proof of ownership and title to property through the immutable and transparent blockchain and so much more. Once on the fringe of innovation in the real estate business, now blockchain technology is widely, consistently and seriously utilized across the mainstream real estate industry.
In an article that I wrote for Forbes, I summarized this technology’s beneficial impact on the real estate industry. Blockchain technology provides the industry with a new system that values trust, reduces dependency and friction, dramatically improves cost efficiency, accelerates property transactions, and maybe, most importantly, opening up opportunities for networking by developing a digital platform that many other services can join to collaborate, thus democratizing the industry by removing so many unnecessary barriers to entry.
FIBREE
Every year, the Foundation for International Blockchain and Real Estate Expertise compiles a Global Industry Report – a compilation of research focused current business trends at the intersection of blockchain technology and the real estate industry. This report provides invaluable insight into the current status of Proptech, CREtech, Greentech, Fintech and Decentralized Finance companies working to create efficiencies and new ways of developing, investing in, building and transacting in the real estate world.
The brand-new 2022 report, released today (June 30th, 2022) comprises 167 pages of valuable insights, 20 articles by industry experts, 32 countries in a detailed analysis, and 476 products in the global database.
As a US Regional Chair for this global organization, I have been deeply involved in the development and implementation of various projects FIBREE is currently working on, on a global scale.
Distributed Ledger Technologies (DLT) are becoming a real force of change in the real estate industry, one that has seemingly remained stagnate when it comes to integrating technologies to bring about greater efficiencies, more data management and insight, easier ways to transact deals, etc.
It really comes down to proving a value proposition – proving that blockchain and other distributed ledger technologies improve some specific aspects of doing business and getting business done. This is where FIBREE is truly providing value to the IT, tech and real estate industry, worldwide. FIBREE has established pilot projects around the world, proving blockchain use cases for many various elements of the real estate business – from title and lower the entry barrier for companies or individuals in applying innovative solutions.
One of the first endeavors on this front is the FIBREE Tokenization Challenge, which has been established to drive the scale and adoption of tokenized real estate assets worldwide. Another important project established by FIBREE is the Unique Object Identity (UOI) pilot program that includes 14 pilot projects in eight different countries. FIBREE has also developed studies and programs around the most impactful topics in the real estate investment and development space, including: crowdfunding & tokenization, NFTs & real estate, buying real estate with cryptocurrencies, blockchain-based climate action in the real estate industry, the FIBREE Fintech Navigator, and a global network of blockchain real estate professionals as well as a blockchain real estate product database.
All of these projects help us refine the concepts and to create an open-source process that can be applied in any country, on any property in the world.
As part of FIBREE’s ongoing research, this year is the fourth year FIBREE has conducted the global Blockchain and Real Estate Survey. One of the key insights learned from this global survey is that there are hundreds of blockchain + real estate products that have launched around the world, and are positively affecting the industry in countless ways.
