One of the industries that is most prominent all over the globe is real estate, which is also a key
contributor to the economy of India. India's real estate market has expanded significantly over the years
due to infrastructural developments in housing, offices, commercial real estate, retail expansion, and
manufacturing spaces.
The two main features of real estate assets are that they are heterogeneous and immobile. These two
elements contribute to the real estate market's tendency to be localised, highly fragmented, and illiquid.
The other reasons that make the whole process of buying and selling in real estate more chaotic are
privately negotiated deals and high transaction costs due to the involvement of large numbers of third
parties. The lack of transparency, high transaction costs and the need for digitalisation in real estate
companies give blockchain technology its game-changing potential.
Since blockchain technology has disrupted financial services and subsequently been widely adopted
throughout businesses, it is difficult to pinpoint a sector that has not been influenced. Blockchain is
employed in a variety of industries, including payments, stocks, venture capital businesses, and the food
supply industry. So how could the real estate industry be left unaffected by it? The following are the
ways in which blockchain technology positively affects the real estate industry.
The most significant advantage of employing blockchain technology is the elimination of the need for a third party to validate transactions in real estate and other procedures, making them faster and less expensive. Many businesses have been required to pay millions and even billions of dollars to the intermediary that connects buyers and sellers of the assets. The peer-to-peer link made possible by blockchain technology in real estate has allowed for the saving of the money formerly paid to the third party.
As a decentralised technology, blockchain empowers security and trustworthiness. All peers in the network have access to the data recorded on the blockchain, making it transparent and unchangeable. Instead of having to manually enter property information onto several systems, agents or sellers can do it once in the blockchain database. Buyers and sellers can make transactions with more confidence knowing that information can be independently verified by peers. Therefore, fraud attempts can also be reduced in this way.
The transparency of the real estate transaction records is one of the most significant benefits that has been attained via the utilisation of blockchain technology in real estate investment. Every record of payments made by domestic and foreign real estate investors and investments is stored in digital format, which is secure and error-free.
Data submitted to the blockchain is permanent and can not be changed. This prevents the data from being manipulated or interfered with by third parties. The use of blockchain technology in real estate gives users more control over their data.
Blockchain lowers the obstacles to real estate investing by enabling fractional ownership. Investments often demand a sizable down payment to purchase real estate. As an alternative, investors can combine their resources to buy more expensive residences. With blockchain, investors will only need to open a trading app and use it to purchase and sell even fractions of tokens according to their preference. Additionally, fractional ownership will assist them in avoiding managing the properties themselves, including leasing and maintenance.
The primary blockchain use case in the real estate sector is the issuance of contracts. There is a lot of
documentation involved in establishing a land title, and that paperwork might be misplaced or
misinterpreted. Moreover, the asset transfer paperwork procedure is also time-consuming and
expensive. This procedure and its problems have been overcome owing to the development of a
technology known as the blockchain. This technology manages the paperwork in a digital format that is
simple to update, secure, and error-free.
The purchasing and selling of real estate assets have been transformed by blockchain technology.
Compared to the earlier methods, the process is a lot simpler now. Customers can gain significantly from
blockchain technology in the real estate industry since it makes transactions faster and more
transparent, makes digital documentation easier with fewer mistakes and makes money transfers
smoother. Additionally, it aids in raising funds by bringing together various individuals throughout the
world.