The big question among brokers: how will blockchain translate into more sales? Image Credit: Shutterstock

While much has been said about the advantages of blockchain in real estate, opinions from various industry players remain varied. Those belonging to real estate investment firms, which are often among the first to adopt advanced technologies, are usually the more enthusiastic ones, while reservations can often be heard from smaller brokers.

“A blockchain’s smart contract is a bit like Apple wallet. It will revolutionise real estate the same way, no more tonnes of binders of contracts,” says Steffen Schaack, senior vice-president of global business development real estate at Drooms, which provides data “rooms” for commercial real estate transactions, such as hotels.

Stefan Hickmott, founder and CEO of Evarei and the Evarium Investment Fund, says blockchain’s speed and flexibility are the key features that make real estate assets a more liquid commodity. Furthermore, it can also usher in a radically new way of appreciating property.

“You buy a digital token, which streams all the benefits to you, and you can get rid off it at a click of a button,” says Hickmott. “You won’t look at it anymore in terms of ‘I own so many square feet’.”

The blockchain platform is also optimising the private equity model, allowing to create value or trade as people please. “We make it more liquid. You can invest [in a property] without having to hang on to it for 10 years,” says Hickmott. “You can trade with your share (token) and enjoy instant liquidity at any time.”

Blockchain versus shares

The use of digital tokens would break down traditional barriers and create freedom, says Hickmott. “You could upload them wherever and see daily updates of assets, social capital. [It’s] an engaging experience. Digital tokens could tap global liquidity 24/7 all year round, and you don’t have to be knowledgeable about stock markets to invest,” he explains.

Buying real estate would no longer necessarily be about the highest profit, but rather about being part of a community, in which buyers are engaged with their choices. “We could create trillion-dollar companies in no time in real estate, if we can nail this liquidity thing,” Hickmott reckons.

However, according to Craig Plumb, head of research at JLL Middle East and North Africa, the technology hasn’t had a considerable impact on property sales as of yet.

“It’s early days,” says Plumb. “I found 40,000 available properties listed on traditional medium, some may be duplications. However, on platforms using bitcoin and blockchain to sell properties, I only found seven projects, so there may be a few hundred units.”

Among developers, he says MAG PD is leading the way using the technology. “Then there is Aston Plaza & Residences by the Knox Group in Dubai Science Park. They have been selling using bitcoin for a number of years now. There are 1,300 units for sale, and they sold 40 up to now,” adds Plumb.

Admitting he isn’t much of a tech person, Juwaad Beg, CEO of Elite City, a development in Business Bay, is one of those brokers who still haven’t figured out how blockchain could help sell.

“Anything that creates more transparency and serves the consumer is a good thing, but I also think that blockchain is a big hype, and only came to the fore because of bitcoin. Will it come and go, or stay?” he asks. “Block-chain is great to store digital assets, such as title deeds, but for marketing, no, I prefer Instagram.”