London-born advisory and accountancy network Moore Global has published a
new report gathering expert opinions worldwide about the future of the
tokenized real estate market.
Tokenized property remains niche, largely due to its relative novelty
and remaining regulatory uncertainties. Yet a new report has noted that
even if just 0.5% of the total global property market were to be
tokenized in the next five years, it would be on track to become a $1.4
trillion market
In recent years, the total value of the global
real estate market has hit a staggering $280 trillion, eclipsing most
other major asset classes and on par with the value of total global debt
accrued by 2020. Moore Global, a London-born international advisory and
accountancy network, has published a report collating expert opinions
worldwide on the potential of tokenization for this thriving, if
traditionally illiquid, asset class.
For Dan Natale, Moore
Global’s real estate and construction leader and a managing partner of
Segal LLP in Toronto, blockchain's key benefit to the sector is a boost
to liquidity by providing efficient, disintermediated infrastructure to
underpin new secondary markets. David Walker, a managing partner of
Moore Cayman who works as an auditor specializing in digital assets, has
for his part claimed that the transparency and security of the
technology also offer evident advantages from an auditor’s perspective.
Until
now, the expansion of real estate tokenization has fallen short of
expectations, due in part to institutional investors’ hesitancy and the
absence of established secondary markets for security token trading. This, however, may be gradually changing, with the United Kingdom’s Financial Conduct Authority granting an operational license to digital security exchange
Archaz in August of last year. One year prior, Germany’s Federal
Financial Supervisory Authority (BaFin) had approved its first blockchain-based real estate bond, issued on Ethereum.
Related: Tokenized Real Estate Hasn’t Lived Up to the Hype: Property Researcher
Andrew
Baum, director of the Future of Real Estate Initiative at Oxford
University’s Said Business School, thinks that tokenization in real
estate could finally take off if there is evidence of investor demand
for fractional ownership – something that advocates of tokenization have
championed since 2017.
Last
summer, a security token representing fractional ownership in the
luxury St. Regis Aspen Resort in Colorado went live on Overstock’s
regulated tZERO exchange, attracting record trading volumes. Within less than a month, however, with the token seeing a relatively flat performance
amid the coronavirus slowdown, investors were being offered major
discounts on their stays at the resort to help boost the token sales.
tZERO has nonetheless recently struck a partnership to tokenize $18
million worth of shares in NYCE Group – a platform hyped as a potential “Robinhood of real estate investing.”
source link : https://cointelegraph.com/news/tokenized-real-estate-market-could-hit-1-4t-despite-a-slow-start-report-claims
