How blockchain is making monumental changes in the property industry.
While blockchain technology in the real estate market is yet to become common practice, industry players are hopeful that it will eventually be used to streamline and improve operations in leasing, purchasing and sales, resulting in higher trust, lower costs and faster transactions.
"Blockchain has the potential to play a much larger role in commercial real estate transactions in an industry traditionally fraught with red tape and bureaucracy. The property market is ripe for innovation and this monumental change will pave the way for more transparency and faster, more efficient transactions. Blockchain could also be useful to help the property transaction tap new sources of funding to buy property if one day the significant issues regarding cryptoassets can be worked through."Lee Wee Liat, Head of Real Estate Equity Research at BNP Paribas Asia Pacific
This new technology is seen as benefiting the property industry in three key ways:
- Enabling faster transactions
Blockchain allows a more seamless peer-to-peer transfer of funds and data by cutting out the many different players involved in property transactions. Some proponents of the technology already envision a world where conveyancing fees are eliminated. By storing all the required data in one database that is easily accessible to the buyer or seller, blockchain technology could dramatically speed up the process of buying and selling real estate.
- Cutting costs and adding transparency to transactions
By storing all information in one ecosystem, the use of a smart tenancy contract on a blockchain platform would enable transparency in lease terms and transactions. With more data around prices, investor confidence and liquidity could grow.
- Reducing fraud and hacking
By design blockchain makes it near impossible to tamper with data and eliminates real estate fraud. Data is decentralised in an open and digital source. With each block built upon another and all information visible to everyone, there is no way to falsify, change or even delete the data.