The real estate industry is undergoing rapid development and digital transformation and the latest feather in its hat has been the use of blockchain. Blockchain in Real Estate has been gaining popularity at an astonishing pace and is being used in property management, land registry systems, property mapping, smart contracts and many more. Let's have a look at some statistics which portray this popular trend in the markets.
The worldwide blockchain industry is forecasted to achieve a valuation of $403.36 billion by 2030, with a compound annual growth rate (CAGR) of 67.7% between 2023 and 2030. Blockchain adoption is further fuelling blockchain spending in big conglomerates by an average of 48% annually. Furthermore, blockchain in real estate markets is expected to reach USD 3,884.8 million. Demand for Blockchain Development Services is also seeing an exponential rise. Here are some of the ways blockchain is being implemented in the industry and reaping its gains:
Asset and Funds Management
Blockchain technology is instrumental in protecting any sort of transaction from network vulnerabilities. Its decentralization feature is being actively incorporated into various assets and funds management platforms
Loan and Mortgage Securitization
A blockchain-powered securitization platform is also a marked trend. It is offering several benefits, such as streamlining operations, decreasing costs, increasing transaction speed, improving transparency, and reinforcing security. Mortgage and loaning institutions are making the best of blockchain backed securitization platforms. The records are immutable and decentralized which further adds to security of the loan and mortgage facilities.
Property Management Blockchain platforms
Real estate management but through a decentralized blockchain platform is also gaining momentum. Be it, businesses, real estate brokers, or individual owners, everyone is intuitively employing immutable smart contracts and decentralized assets to facilitate real estate management via these platforms.
Land and Property Registries
The blockchain land registry platform enables users to submit title documents to the blockchain network, where stakeholders sign it and other users can verify it as needed. Real estate Blockchain helps verify the owner of the land title and discourages fraud by retaining an immutable record of transactions.
Property Development and Construction
Large construction projects have grown increasingly challenging to manage due to a lack of supply chain transparency, fragmented subcontracting and procurement practices. Blockchain technology can help to streamline procurement by managing reputations for suppliers and subcontractors, rewarding great performance. Furthermore, by linking items with non-fungible tokens and utilizing them as digital blockchain certificates, blockchain can authenticate the real estate tokens at their place of origin.
Urban Planning
Educational resources, token-based participation incentives, and a feedback loop between stakeholders are great features of blockchain-based planning platforms. This stimulates community involvement and better incorporates local communities into the property development value chain, enhancing public trust and developer services for long-term success.
Investor and Tenant Identification
Blockchain-based digital IDs are extremely useful in the real estate division. Tenant and investor identities derived from mutualized blockchain-based KYC/AML procedures speed up background checks, cut expenses, and improve security.
Payments and Leasing
Leases can now be signed and paid on-chain, thanks to distributed ledger technology. This eliminates the need for manual reconciliations and automates the payment of rents and dividends to property owners.
Challenges of Incorporating Blockchain in Real Estate
Blockchain real estate is extremely beneficial but is riddled with many challenges, a few of them are:
Lack of technical skill sets
There is an acute shortage of skilled tech engineers which makes it difficult to source the technical expertise required to implement blockchain in real estate. Due to this, many engineers lack the technical skill sets to develop blockchain-based software applications.
Legal restrictions
The existing legal frameworks of the countries are not definite and lack parameters and regulations. While some blockchain technologies are already in use across various real estate apps, some consumers don’t completely trust them yet, as few laws have still not legalized their workings.
Undiscovered applications of technologies
Blockchain in real estate is a relatively new industry which means that it still lacks innovation in integrating the latest technologies such as AI, ML, IoT, etc. However slow, the industry has a lot of potential and can do wonders with blockchain integration.
Conclusion
Blockchain addresses various threats to conventional real estate such as lack of transparency, slow operations, unsecured titles, and slow unsecured transactions. Integrating blockchain in real estate platforms is surely a game changer for businesses looking to invest in the same. Blockchain applications in real estate are thus gaining popularity and generating revenue while reinventing the way the real estate industry functions. These applications need to be carefully built by a reliable real estate development company that can make the best of blockchain in the real estate application.
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