The real estate industry doesn’t exactly have a reputation for being on the cutting edge of technology. Most real estate deals are tediously slow, relying on antiquated government record systems, middlemen service providers, and delay-prone traditional payment channels for even relatively simple transactions. But what happens when these records, services, and payments are updated with blockchain technology?
That’s a question dozens of well-funded blockchain startups are looking to answer. The result could be a game-changing disruption in the real estate status quo, streamlining the process at every step. In this post, we’re taking a look at five exciting new ways blockchain technology is transforming real estate.
1. Realtors are investing in blockchain platforms: In June, the U.S. National Association of Realtors (NAR) announced that it had purchased a stake in blockchain-based real estate platform Propy. The platform aims to give realtors and their clients easier access to blockchain-based resources and settlement options. While the specifics of the deal — including the amount the NAR’s Second Century Ventures VC fund invested — is unknown, Propy has reportedly raised around $15.5 million to date.
2. State governments are investigating blockchain for real estate: In February, the County Auditors’ Association of Ohio announced a partnership with real-estate blockchain startup SafeChain to investigate methods for improving deed transfer speeds within the state. Ohio already allows some companies to pay their state taxes with bitcoin, and officially recognizes data and transactions on blockchain ledgers, making it entirely possible that the state would adopt a blockchain-backed property transfer system.
3. National governments are testing blockchain property records: In 2017, the Swedish National Land Survey began testing a blockchain-based land registry platform provided by tech startup ChromaWay. The registry would make it much easier to verify land ownership, and to track land transfers. Other countries, including Holland, Honduras, and Georgia, are also considering similar blockchain-based real estate registries.
4. Real estate transactions are becoming big business for payment processors: According to Sonny Singh, Chief Commercial Officer at bitcoin payment processing giant BitPay, cryptocurrency settlements for real estate transactions are rapidly becoming a core part of their business. BitPay has reportedly processed $31 million in real estate deals since 2017, with an average transaction size of $1 million. The firm reports that international buyers from China, Turkey, and Brazil are increasingly interested in bitcoin-based real-estate purchases.
5. Tokenized real estate investments are becoming more common: What happens when an individual piece of real estate becomes tokenized? That’s a question firms like Inveniam Capital Partners (ICP) are looking to answer by breaking up the ownership of a $65.5 million Florida property across a limited number of ERC-20 tokens on the Ethereum blockchain. This approach could also create a funding mechanism for new real estate projects, raising money in much the same manner as an initial coin offering (ICO).