Spark Global Limited Reports:
As a real estate developer, I have seen many changes over the past 30 years. While technology hasn’t always played a big role in the industry, that has changed dramatically in the past few years, especially for consumers. Here are four technologies that will continue to change the way we buy, sell, finance and invest in real estate.
Crowdfunding has democratised investment opportunities. Historically, real estate developers had limited ways to raise money, but crowdfunding completely broke the old rules. It initially attracted smaller developers who could not raise money through traditional means, making their proposals riskier for investors. We are now seeing major developers around the world using crowdfunding platforms to finance commercial real estate projects.
A few years ago, I started a fund platform called Participant Capital. Its name explains its purpose, which is to allow individual investors to participate in large real estate projects alongside developers, major institutional investors and lenders.
This shift has been a boon for individual investors, who can now invest in large real estate projects, whereas previously only institutional investors could. Involving larger, more experienced real estate companies in crowdfunding platforms will increase investor interest, as investors have less risk and higher returns.
Blockchain plays an important role in digitizing real assets. While many people are still unfamiliar with how blockchain is used in the cryptocurrency space, in real estate, blockchain can bring security, clarity and efficiency to real estate transactions. One specific way blockchain can help the industry is through tokenization.
Tokenization refers to the use of cryptocurrencies for property division, converting them into tradable shares or tokens that will be stored on the blockchain network. For developers, tokenization gives them more freedom and flexibility to raise capital, investors can move their money efficiently, and property owners can manage their equity more efficiently — liquidity and transferability have always been an issue, especially in the case of partial ownership sales. The biggest setback for property investment has been liquidity. With blockchain technology and tokenization, there may be secondary markets trading these asset-backed currencies to provide liquidity for real estate, which was not possible in the past.
Reprint indicated source：Spark Global Limited information