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From the recession, the commercial real estate sector recorded exceptional growth. Market prices have peaked significantly and are expected to increase in 2019. This makes the industry more welcoming than ever. Even if the market is bombarding, investment is not as convenient as it should be at this time. From a lack of financing options to the issue or from frauds and high costs of intermediaries, industry has a serious need for intervention. This intervention can only be provided by blockchain technology.
How Blockchain will redesign the commercial real estate sector
As you probably already know, blockchain is an immutable ledger that records transaction data. It is the best technology for accessibility, transparency and traceability. These properties, if implemented in real estate, can change the game for the better. For beginners, with blockchain technology, there is no need for intermediaries. This would save costs to pay an agent after another. Furthermore, by using cryptocurrencies, an application of blockchain technology, the cost of bank commissions is eliminated to pay for property. Commissions associated with third-party platforms such as engagement will also be ignored as smart contracts can be customized to meet the needs of the user.
In addition, cryptocurrencies are tokenized by making ownership of crowd ownership possible. People who can not afford to buy whole properties on their own can buy them in parts. These investors will receive transferable tokens of their shares. These tokens can be verified on the blockchain making the real estate sector more accessible.
Then there is the question of fraud. How can blockchain technology prevent commercial property fraud? The blockchain is immutable. It can be used to validate documents efficiently without fear of human error or fraud. When it is necessary to transfer the properties, the records are added to the blockchain followed by the formation of a complete history. During sales, a buyer can quickly verify if the seller is fraudulent.
Blockchain technology applied in real estate
Already, many companies are starting to implement blockchain technology in real estate. For example, i-House.com has recently implemented ATO (Asset Tokenization Offering) projects. These projects offer users the power to finance real estate development projects with a cryptocurrency created by the company.
This ATO model increases real estate accessibility through a verifiable platform. This project will positively upset industry over the long term. The founder of the company, Ricky Ng, said this:
"Our goal is to create an ecosystem that promotes global asset management on a global scale.The i-House ATO offers developers, homeowners and end users a means to easily share and possess resources" .
The project is already doing waves in the sector. Not too long ago, the cryptocurrency exchanges, UPbit and Bittrex, listed the company's token as being tradable digital goods. The token is already listed on KuCoin, Cashierest, Coinw, Gate.io, Allbit, CoinTiger, LBank, CoinBene and HitBTC. According to the company, more exchanges will list the token in the future.
Bitcoin (BTC) Price today – BTC / USD
One thing is clear, blockchain technology will have a disruptive effect in real estate. It will change everything from how transactions are initiated to the way they are managed and completed. When there are better incentives, more investors will be pushed to invest in the commercial real estate market. This, in turn, will foster economic growth.
