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Real Estate Business Review | Wednesday, May 26, 2021
The blockchain technology that was initially used to verify cryptocurrency transactions is now being used in real estate dramatically, where transparency and verification are a top priority. These days, blockchain is used to confirm personal identity, land registries, and voting ballots over the globe.
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Companies are approaching innovative ideas and developing systems that use blockchain technology to speed up the hectic property purchase process and save time for homebuyers. As per a survey, most real estate firms with more than 250 million dollars in assets are directly investing in one or more than one PropTech companies globally. In addition, investors like Brookfield Properties, Oxford Properties, and brokers like CBRE and JLL are investing in PropTech firms.
The most recent CRE innovation report of Altus that examined 400 senior real estate executives around the globe reveals that 53 percent of investors with more than 250 million dollars in assets are directly investing in PropTech. And PropTech firms, which specialize in intelligent building systems and online lending marketplaces, are most famous for direct value investments.
However, the study also showed that almost one in ten executives don't understand the concept of blockchain and its advantages but are still 38 percent are investing in this technology directly or indirectly, and 37 percent of executives are expecting the impact of blockchain on the real estate industry within the next two years.
Lately, Hong Kong Applied Science and Technology Research Institute (ASTRI) and New World Development, a property building firm, have collaborated to launch a blockchain platform- PropTech- for homebuyers to replace paperwork operations. It will enable users to send the purchaser's encrypted, authorized, and digitally signed agreement to a few selected banks, reducing the load and paperwork of approving mortgage applications, signing lease documents, and purchasing contracts.
The real estate firm's accounting, compliance, and cash flow management have digitized requirements on the blockchain to deliver the highest level of transparency through smart contracts. In addition, the utilization of intelligent tenancy contracts on the blockchain platform clarifies contract terms and transactions. This enables property managers and real estate owners to use the bond for automated payments in real-time.
The utilization of blockchain technology in real estate will carry transparency to transactions and offer an open and shared database for all the parties involved, resulting in real-time recording and retrieval and improving data quality.
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