The advancements made in the field of science and technology has transformed the working systems of every segment. The industry which used to run on paper and human connections is on the verge of complete digital Transformation. Technology in this regard is changing the real estate industry for the greater good. Under technology, Blockchain possesses the abilty to bring transparency and change the industry like no other technology could. In this blog, we will go through the dynamics of Blockchain that are in the play, and how it has touched almost every sector across the globe, including the real estate sector.
Blockchain Technology and Its Relevance to Real Estate
Blockchain technology refers to a peer-to-peer network that handles decentralized ledgers of myriad transactions. It is, to quite an extent, influenced by cryptocurrency, which has taken over the finance segment lately, thereby making it quite likely for liquid money to lose its importance as a medium of exchange over the years to come.
The real estate sales, governed by the property value chain, may soon be taken over by blockchain. This projection indicates that soon blockchain may be used to purchase real estate through crypto-currencies and tokenization.
Another crucial role where blockchain comes in real estate technology is tokenization, and with it comes the possibility to trade for properties just like crypto-currencies are traded.
Even though the complete adoption of blockchain in real estate may take a decade from now, the groundwork has already begun. Once the pieces fall into place, there would be a complete overhaul of the industry which would benefit every individual involved in it, directly or indirectly.
Unveiling Blockchain Dynamics in the Real Estate Industry
However, to reap full-fledged benefits in real estate, blockchain technology requires understanding its dynamics thoroughly and deeply. Let us understand them in detail and highlight the advantages they would bring to the Indian real estate market.
1. Boosts Operational Efficiencies
Blockchain in real estate has offered a new means of establishing a connection between buyers and sellers. It has cut intermediaries, which has helped cut down costs for the real estate industry.
It has further securely facilitated data sharing, streamlining rental collections and payments to property owners, and even eased premium due diligence across the portfolio. With complete transparency, everyone in the chain gets complete information and is fully aware of the developments taking place at any given point of time. This way, it has become easy for investors and realtors to get valuable insights anytime, anywhere.
Also, safe and faster data transfer has solved the issue of non-transparency and slowed operations. Fractional ownership has attracted investments and even granted access to the secondary markets.
2. Solving The Challenge of Transactions
Blockchain in real estate has made transactions secure and fraud-free. With real estate blockchain, property transactions do not have to go through third parties as there is nothing underhanded.
You can now streamline payments and get proof of parties possessing enough funds needed to close the transactions in both rental and purchase scenarios. This way, the challenges of transactions in real estate can be secured and transparent for both buyers and sellers of the same.
3. Smart Contracts and Agreements
Smart contracts in real estate help in automating the agreement process and eliminating the involvement of intermediaries. It simplifies business operations and has even scaled down the traditional methods of executing a transaction, keeping the authenticity and credibility intact.
Virtual currencies cooperate on the same technology and further help transform paper-driven and offline commercial real estate transactions like sales, financing, leases, etc., into the digital mode.
These contracts run on the blockchain as computer code. They are stored on a public database that cannot be altered or changed, thereby maintaining the safety and security of the deals between parties and even increasing their transparency. Also, the chances of fraud are reduced to a bare minimum.
Also, with blockchain technology spreading its wings over the real estate sector, smart contracts or electronic contracts may become popular. These contracts perform defined actions automatically by using computer protocols and monitoring stored clauses.
Real estate does not seem a very reliable liquid asset to most people as it takes a lot of time to conclude a sale transaction.
But, with tokenization and crypto-currencies in this segment, executing transactions will become easier and quicker. Properties can now be bought and sold like stock on exchanges with cryptocurrencies, lowering crowd-funding barriers. It has made the sector more advanced and innovative with the introduction of tokenization through cryptocurrencies. It has improved the liquidity and security of transactions through smart contracts and agreements, paving the way for excellent prospects in the years to come.
Now, sellers do not have to wait for a financially stable buyer to come their way. Instead, sellers who understand the value can readily trade in real estate properties, even in fraction ownership. This way, tokens’ liquidity may increase, and real estate may soon be turned into a leading revenue-generating sector.
5. Regulatory Mechanism
Real estate and property management involve complex regulations that must be followed diligently and adhered to on time. Blockchain in real estate helps in regulating and improving private regulatory compliance by streamlining the process of buying and selling properties and even making it more secure. This way, buyers can easily trace the history and ownership of a property. Sellers can get better transparency around the sale process. This is made possible because blockchain lends itself to improving compliance processes by helping compliance officers keep track of all the complex regulations required therein.
Real estate blockchain development trends have increased over the last decade. This technology has brought innovative measures that lay the foundation for a bigger and better good for the real estate industry in the future.
Hence, in a nutshell, blockchain is here to change the industry for the greater good, and this universal system of buying and selling on a global platform is only going to put the real estate industry in the mainstream on the global economic map.
BeyondWalls, a tech-driven online platform providing collaboration between Real Estate developers and channel partners in the industry, excels in providing an integrated proptech ecosystem where property buyers and sellers can have a seamless journey through endless offerings that benefit both parties in a fair deal. With considerable experience in real estate, the company aims to project the real estate ecosystem in India as the market leader on the global network.