Blockchain technology which was initially used for the verification of cryptocurrency transactions, is now being used in real estate dramatically where transparency and verification is a top priority. These days, blockchain is used to verify personal identity, land registries, and voting ballots across the globe. Companies are coming up with innovative ideas and developing systems which use blockchain technology to speed up the hectic process of property purchase and save the time of homebuyers. Majority of real estate firms with more than 250 million dollars assets are directly investing in one or more than one PropTech companies across the world as per a survey. Investors such as Brookfield Properties, Oxford Properties, and brokers such as CBRE and JLL are investing in PropTech firms.
The latest CRE innovation report of Altus that surveyed 400 senior real estate executives around the globe reveals that 53 percent of investors with more than 250 million dollars assets are directly investing in PropTech. And the PropTech firms which specialize in smart building systems and online lending marketplaces are most popular for direct value investments. The study also revealed that almost one in ten executives don’t understand the concept of blockchain and its benefits but are still 38 percent are investing in this technology directly or indirectly and 37 percent executives are expecting the impact of blockchain on the real estate industry within the next two years.
Recently, Hong Kong Applied Science and Technology Research Institute (ASTRI) and New World Development, a property building firm has collaborated to launch a blockchain platform- PropTech- for home buyers with an aim to totally replace paperwork operations. It will enable users to send the encrypted, authorized and digitally signed agreement of the purchaser to a few selected banks and hence reduces the load and paperwork of approving mortgage applications, signing lease documents, and purchase agreements. The real estate firms have digitized the accounting, compliance, and cash flow management needs on the blockchain to deliver the highest level of transparency through smart contracts. Utilization of smart tenancy contracts on blockchain platform brings clarity in contract terms and transactions. This allows property managers and real estate owners to use the bond for automated payments in real-time.
The use of blockchain technology in real estate will bring transparency in transactions and offer open and shared database for all the parties involved that will result in recording and retrieval in real-time, improving data quality.