How Blockchain Technology Is Transforming the Real Estate Market?

Audil Rashid Khaki (), Omar Ali () and Somar Al-Mohamad ()
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Audil Rashid Khaki: American University of the Middle East
Omar Ali: American University of the Middle East
Somar Al-Mohamad: American University of the Middle East

A chapter in Blockchain in Real Estate, 2024, pp 15-33 from Springer

Abstract: Abstract This study attempts to examine the evolution and implementation of tokenization in real estate projects and the potential applications of blockchain in property management and real estate transactions. The study explores some common themes from the existing successes/failures of projects in the real estate tokenization ecosystem, to assist in the development of a case for the adoption of blockchain across the real estate management processes, while underscoring the existing potential risks and uncertainties related to security, regulation, registration, compliance, and physical-metaverse interface. The examination of the existing evidence suggests that the adoption of blockchain-based solutions can significantly transform the real estate market by offering automation in registrations, fractionalization, property management, crowdfunding, investor outreach, flexibility, customization, administrative simplicity, operational efficiency, greater investor demand, and so forth. We also observe that while blockchain technology may offer substantial benefits to the real estate sector, there are some challenges like ownership of fractional assets, lack of market depth, over-cautious regulation, asset recognition, the prevalence of single-asset tokenization, cryptocurrency sentiment, etc., that are slowing down the pace of blockchain adoption in the real estate sector.

Date: 2024
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DOI: 10.1007/978-981-99-8533-3_2

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