Global Real Estate is worth $280.6 Trillion Dollars
The global real estate market is huge. How huge you may ask? Think $280.6 Trillion Dollars huge.
According to Yolanda Barnes, head of Savills World Research, at the end of 2017 the value of the world’s real estate reached $280.6 trillion, the highest figure they ever recorded. Of that number, Residential real estate was valued at $220.6 trillion, or roughly 78.6% of the entire market share. To put things in perspective, the global real estate market is
- more than 3.5 times the World’s GDP
- 2.5 times the Worlds’ Oil reserves
- 1.5 times the Worlds Financial Instruments (Equities and Debt Securities Combined)
With Global Real Estate being so highly valued, it stands to reason that it should be easy for people to buy and sell real estate worldwide, right? WRONG. Global Real Estate is in need of a dramatic transformation and blockchain technology is the answer it desperately needs.
Two main problems the global real estate industry faces today is limited access and illiquidity. We live in a digital era where information runs freely throughout the world, however when it comes to the traditional way buying and selling real estate, the information is much harder to obtain. Imagine you live in America and wish to purchase a property in Costa Rica. Or perhaps you are from China looking to purchase in Canada for instance. All across the world, these individuals will face similar difficulties- accessing and selling properties to make a quick and easy transaction.
The way things are done now is painfully slow, difficult, tedious, and requires a whole bevy of intermediaries to fascilitate the transaction. Needless to say, this can be very stressful for all the parties involved. If I want to buy a property abroad, the process is daunting.
Who do I call if I don’t know anyone? What properties are available? What are the legal ramifications I should be aware of? Most people would start with a google search to find some information, but there’s no guarantees any information found is still valid. Not to mention, dealing with property owners and firms requires international calls, endless emails, and the list goes on and on.
The same arduous process for finding a suitable property to purchase internationally can also pose a problem for sellers. Liquidity is defined as how quickly an asset or investment can be converted into cash. Lets say for instance you have a $5 million dollar home in a beautiful community in San Diego.
Typically sellers have to rely on the ability to find local buyers for their property. Not only do these buyers have to have the right finances, they must also have access to the local MLS where the property is located or happen to stumble upon it on national sites such as Zillow or Trulia. Houses like this can stay on the market for many months or years since the pool of buyers is much smaller due to how difficult it is for people in other cities, domestically and abroad, to find the listing.
Global Real Estate and the Blockchain
Imagine a global platform where sellers can list their property and find buyers from all across the world. A platform that facilliates a much easier process for buyer and seller to find each other. From there, both parties can complete the deal using blockchain technology and smart contracts from the comfort of their own home and eventually have a completed transaction officially recorded.
One such company who has done this is Propy. Propy has created a Global International Marketplace designed to address this situation amongst other things. Sellers can list their property and buyers from anywhere in the world can find it and contact the seller or his/her agent directly.
The international buyer in China has the direct contact information for the property they are seeking. They can within minutes send cryptocurrency as a deposit and from there get the purchasing process underway. The Seller from San Diego has a marketplace filled with potential buyers from all across the world, increasing the supply of people who are open to their listing. They may wake up one day to find a buyer from Spain, wishing to purchase their property.
The End Result
In the end, platforms like Propy are utilizing Blockchain technology to make real estate transactions more efficient and trustworthy. These are things that will only stand to benefit society as a whole once more mainstream adoption occurs. Its not every day that a technological advancement presents itself to impact an industry worth $280 trillion dollars. Its an exciting time to be involved in this space and see this emerging technology slowly change the world.