< Back to Blog

Future of Real Estate is Fractional

From RealChain’s Web3 Research Institute

Real estate is one of the prominent business industries around the globe. A report by Grand Review Research says that between 2022 to 2030, the size of the global real estate market, which was initially estimated to be worth USD 3.69 trillion in 2021, is expected to expand at a compound annual growth rate (CAGR) of 5.2%. Commercial real estate will be the most major contributor to this growth , and is bound to be on top of the list;.

Real estate professionals and investors need to be aware of the latest trends and possibilities in the real estate market to thrive in it. As with any other industry, new concepts and ideas potentially disrupt older concepts, and the real estate industry is not an exception. In this article, you can explore what fractional ownership real estate investment is and how one can benefit  through tokenization and fractional investment opportunities approaching.

What Is Fractional Ownership in Real Estate?

Fractional ownership is a concept that has been attaining popularity over the last few years. Everyone shares the asset's income and any increases in the real estate's value, and several investors who are not necessarily acquainted with one another pool their money to buy a piece of property, known as a fractional interest. For instance, 100 unique and unconnected people who invest individually in a 4000-square-foot shopping mall in Mumbai's financial district will cost around ten crores.

Tokenization of the Real Estate Investment

RealChain is transforming the traditionally slow, cumbersome process of real estate buying and selling into an efficient, transparent ecosystem offering users maximum security in each transaction. Each step in the process -- from negotiations to payment to title transfer -- is verified using cutting-edge blockchain technology, ensuring accuracy and accountability. This innovative platform provides unprecedented access to industry data for all participants, allowing individuals to make safer, more intelligent investment decisions. 

With RealChain's industry-leading tools, buyers and sellers can rest assured knowing that their transactions are secure, private and protected under a secure blockchain system. Based on the report by BCG, one can understand that the current volatility of cryptocurrency markets known as the crypto winter provides a higher chance of making real estate ownership fractional as the number of investors looking for low price secure investments will be more at this time.

More and more real-world assets, including stocks, bonds, and other conventional financial products, are migrating to blockchain technology. Tokenization allows investors to gain ownership of real estate properties in digital tokens. These digital tokens offer the option to change the ownership to the buyer’s name when the land deal is completed. The token owners are free to buy, or sell and gain profit and are benefited because of the rapid settlement transactions offered by web3 technology. The constant trading, the availability of foreign investors, and the much higher liquidity make it a great option for investors to gain even during high volatile times.

A tokenized security, also known as a security token, is a security that exists on the blockchain. The tokenization of substantial physical assets, including land, buildings, infrastructure, solar, wind, etc., is the primary focus of DigiShares. The digitization of shares and bonds makes it possible to trade these digital securities online without intermediaries. By 2027, 10% of the world's GDP, or $7.8 trillion, will be stored on blockchains, according to the World Economic Forum.

On the other hand, “The total size of tokenized illiquid assets, including real estate and natural resources could reach $16.1 trillion by 2030, according to the Boston Consulting Group (BCG)” 

WEB3 Tools Enabling Real Estate Fractional Investments

Real estate assets are tokenized when they are turned into digital real estate tokens that may be exchanged for them on online marketplaces. No middlemen are involved, so the process is quick and less expensive. Web3 and blockchain, their underlying technology, enable the tokenization of assets.

Blockchain, NFTs, cryptocurrencies, and other Web3 technologies and concepts have the potential to alter the real estate industry completely. Real estate on Web3 introduces people to a new world of financial independence, openness, and asset ownership. Every type of transaction can be registered on the blockchain, a decentralized ledger and open-source information management framework provided by Web3. For instance, investors can make secure investments by tokenising their real estate assets with cryptocurrencies. They no longer need to be intimidated by the liquidation problem of cryptocurrency trading that may prove to be unprofitable and make them lose their valuable crypto currencies.

Web 2.0 and Web3 are distinguished by technological developments like asset tokenization protocols, permanent transaction ledgers, and decentralized, easily accessible, transparent ownership documentation. They also assist investors in handling liquidity, proving ownership, and directly and coherently estimating risk without the interference of outside factors. Such Web3-based products and services have the potential to advance and advance the real estate industry significantly.

RealChain: Revolutionizing The Real Estate Industry

The real estate industry is undergoing a revolution as digital technologies become increasingly integrated. Enter RealChain - a disruptive blockchain-based platform revolutionizing how real estate transactions are made, managed and tracked.

All this makes RealChain a trustable platform in the real estate industry for realtors to turn tomorrow's future meaningful. RealChain experts can equip realtors to redefine what it means to be secure in daily life and business investment now and for generations to come. By utilizing Web3 technology, they can smoothly transition from conventional real estate dealings to tokenization for more secure dealings.

In essence, land ownership's future will never be the same again with tokenization of real estates taking over the ownership dealings. RealChain is a global Web3 community that aims to upend and transform the real estate sector by creating learned realtors. It provides incredible chances to early real estate investors in the metaverse and the natural world, by guiding them to make better choices for tokenizing their assets. Connect with us to know more.