Property ownership has traditionally been governed by a set of written rules and guidelines that the legislature decides. The traditional system is notorious for its red-tapism, which leads to inefficiency, risk, and corruption. However, the old world is giving way to the new, digital one; therefore, things are different now.
Thanks to blockchain, the Indian real estate sector is being reimagined. With its disruptive nature and a wide array of benefits, it’s no surprise that many are adopting the technology. From property title verification to creating a digital public ledger, developers have been shifting away from the traditional world order to build more sustainable and fair systems.
We have curated a list of industries that can benefit from Blockchain technology. You can check all the blogs here:
What is Blockchain?
Blockchain, otherwise known as an immutable record of digital transactions, is the buzzword in finance these days. It has been termed as the “next big thing” – disruptive technology steadily making its way into industries that have been most resistant to disruption.
The real estate sector can leverage blockchain technology to improve market transparency and efficiency, resulting in greater profitability for both investors and brokers.
Various industries are being disrupted by the integration of blockchain. Read about how the healthcare sector is being transformed by blockchain.
Real Estate Sector
The commercial real estate industry is one of the world’s largest and most significant markets. It comprises a substantial portion of world economic assets and transaction activity. In India, the commercial real estate sector is slowly adopting the usage of blockchain technology.
Experts in the real estate sector have realized that blockchain-based smart contracts can contribute significantly more to their industry. Blockchain technology has the ability to change fundamental real estate processes, such as property transactions, including the purchase, sale, financing, leasing, and maintenance of properties.
How can blockchain help the current Real Estate sector?
Given the disruption of financial services by blockchain technology and the following widespread adoption across industries, it is challenging to pinpoint a sector that has not been impacted. Blockchain is used in various industries, including payments, stocks, venture capital businesses, and the food supply industry. It has an impact on the real estate industry as well. Here are a few use cases of blockchain integration in Real Estate:
Through the creation of smart contracts, which don’t need external assistance, the blockchain provides unrivaled efficiency. These digitalized contracts are comparable to paper contracts in some respects, but they give the parties the ability to safeguard all the information contained and prevent its change. This will reduce the paperwork and the bureaucratic intervention.
Blockchain can enable smart contracts that automatically handle bills and payments, reducing processing times, ensuring correctness, and preserving and sharing digital data. It will help in reducing and tackling property ownership disputes. Furthermore, this will allow Banking companies to process the Loans faster and according to the prescribed guidelines. Future real estate transactions, like purchasing new houses using cryptocurrency, may be made easier thanks to this cutting-edge digital technology.
Tokenization in real estate involves the digitization of financial instruments, alternative assets, and securities. Tokenization lowers the expenses and accelerates the process of developing new features, issuing and exchanging assets, paying dividends, and managing other company activities. Retail investors may also be able to buy portions of their ideal residences, thanks to tokenization.
Due to the lengthy sales pipeline, real estate has traditionally been considered illiquid. This isn’t true for cryptocurrencies and tokens because, in theory, they can be easily exchanged for fiat money on exchanges. On the other hand, real estate can be easily sold as tokens after blockchain integration. A buyer who can afford the entire purchase is unnecessary for a seller to realize some value from their property.
On the whole, blockchain is a technology with huge potential to revolutionize real estate. However, to do so, it will need to overcome some key challenges, such as standardization and scalability. Nevertheless, the promise of blockchain technology is clear:
- Lowering transaction costs.
- Increasing the speed of business processes.
- Reducing fraud and corruption.
- Providing greater liquidity in a market that has historically suffered from a lack of access to investment.
There is a long way to go to establish blockchain standards and protocols for India’s real estate industry—and it’s likely that we will see significant contentions on what these should be in the coming years. But there is no doubt that this technology will change all aspects of the property sector, from buying to selling and from leasing to investment.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.