The nascent Web3 and its benefits for the real estate industry.
The U.A.E. is investing heavily in technologies of the future. From Dubai’s new virtual assets regulator’s headquarters in The Sandbox metaverse to a slew of real estate developers embracing cryptocurrency, the country is well on its way to diversifying an already multi-pronged economy.
Web3 is fuelling this embrace. Web 1.0 was the elderly statesman with static, hyperlinked pages and limited user interaction. Web 2.0 is the internet we know today, with user-generated content on centralised platforms run by select companies.
Web3 is changing the game. It is a new web, eminently decentralised by blockchain technology, peer-to-peer, immutable and secure.
Blockchain complements further Web3 technologies like virtual reality, as well as machine learning and AI. The central tenet of Web3, though, is simple — open source. Users control their own data and create more directly instead of going through a select group of third parties.
WEB3 AND THE U.A.E.
The U.A.E.'s young and investment-savvy population understands Web3’s intrinsic value. This, along with the government’s commitment to transforming 50% of its transactions into the blockchain platform (saving AED 11 billion in the process), is having tangible effects.
Dubai has witnessed a 24% rise in blockchain use as compared to the global 19%, and can boast of over 100 blockchain-specific businesses. The World Trade Centre has launched the first Metaverse incubator in the Middle East. The Ministry of Economy has hosted the world’s first-ever economic summit in the Metaverse, while The Ministry of Health and Prevention (MOHAP) has also developed a new Metaverse platform. Abu Dhabi, meanwhile, has moved to provide all women residents with free cryptocurrency, NFT and blockchain domains.
REAL ESTATE EMBRACE
The luxury real estate industry is poised to capitalise. 2021 saw real estate sales in the Metaverse reach US$500 million, a quantity expected to double this year. In fact, the market is expected to grow at a Compound Annual Growth Rate (CAGR) of 31% until 2028. It is clear that real estate professionals will gravitate towards selling high end digital properties, effectively tokenising property as commerce.
And consumers are ready. Already, the U.A.E. has seen them being able to avail owner-issued blockchain tokens, representing the value of the latter’s shares in an asset.
Excitingly, immersive property showcases offer the opportunity to experience all the benefits of a luxury real estate service and home, based entirely on the comfort and convenience of the consumer. This decentralised virtual reality is expected to significantly lessen property transaction time, while potentially creating an entirely new luxury real estate market.
NFT deeds could be the next barrier to be broken — going beyond the aesthetic appeal and representing ownership of property. With all purchase information stored on the blockchain, the purchasing process could be significantly streamlined. At the other end of the spectrum, away from the model of complete ownership, fractionalised investment and crypto mortgages using NFTs serve as an easily accessible fillip for greater investment in Web3 applications.
THE NEED FOR SPEED
Ultimately, it all boils down to speed. Web3 could make for a much more transparent and wrinkle-free property process, entirely online. This would mean less time and greater efficiency on a safe and secure platform verified by blockchain technology. Records are either present or not; there is no middle ground.
This will have knock-on effects on other industries too. Easy financing options focused solely on virtual transactions must spring up to facilitate these deals, guaranteeing greater business and revenue in multiple sectors.
PERSONALISATION
Smart contracts and other related Web3 developments can turn any processes or transactions into a few lines of code, which can then be replicated for a variety of applications. Web3 essentially offers that most prized of abilities, particularly in the luxury industry — personalisation. The real estate industry can benefit greatly.
