There are many issues facing the housing market today. Young people, in particular, are feeling the brunt of this, with 40% of young adults in the UK unable to afford to buy a house despite having a deposit. Problems are further caused by the combination of stagnated wages and inflated house prices. The monopoly of the housing market by the banking sector means that this is the current reality of people hoping to get on the real estate property ladder. Blockchain however aims to disrupt this new normal.

Decentralization of Real Estate through Blockchain

The primary benefit of blockchain in real estate is its capacity to decentralize transactions, removing the need for a mediator. One of the reasons that housing prices are so high is because of the involvement of banks and brokers in the process, but blockchain is able to limit this by facilitating peer-to-peer transactions. Digital ledger systems and smart contracts essentially ensure that a transaction is fulfilled and agreed upon by all involved parties and with this, the need for a mediator will disappear.
This alone makes the real estate market far more accessible, but the potential of the uses of blockchain in real estate goes further still. Fractional ownership, in which multiple people or parties may own real estate together, is something that can be extremely difficult to access in the traditional real estate market, but with the use of blockchain, this becomes possible.
Blockchain’s capacity to tokenize traditionally illiquid assets means that multiple investors can partake in a property deal without having to contend with arduous paperwork that is usually required by traditional real estate transactions. While this may not be a problem for property investors from large companies and banks, blockchain opens this up as a possibility for the wider population by removing the usual costs involved in a transaction.
Smartlands, built on the Stellar Lumens blockchain is one platform that aims to decentralize the real estate market by tokenizing real estate. Smartlands aims to help property developers to release their equity much faster by easing the liquidity process. This in turn allows for quicker development of properties, creating a more accessible market.
ATLANT is another such platform facilitating accessibility in the real estate market for renters. Again, through the tokenization of property, transactions could/can be digitized and made more accessible for the renter.

Digital Transparency

Accessibility isn’t all that blockchain real estate has to offer though. The transparent nature of blockchain technology means transactions are safer for buyers. Blockchain transaction records are unchangeable and publicly accessible which mitigates the risks of property fraud and abuse, as well as disables market censorship.
Blockchain removes the need for trust between investors and sellers. Credit and background checks are no longer required thanks to transparent record-keeping and digital identities. Renters with poor credit scores or first-time buyers now have a greater chance than ever before to verify their financial integrity without causing unnecessary anxiety to property owners. This also saves money by reducing the need for credit checks and loans, on top of costs already saved by removing intermediaries.

Real estate Smart Contract

Smart contracts are fundamental to how digital asset transactions are processed. An agreement is recorded on the blockchain platform and payment is processed through a crypto wallet or bank account using a blockchain interface. Upon payment, ownership of the property is then transferred to the buyer and the completed transaction is recorded on the blockchain.
This works similarly in the case of the renter; wherein regular payments will be made via the smart contract to the property owner. The smart contract also acts as a deposit protection service for the renter as it means that it is automatically transferred back into their account upon completion of the lease agreement.
The monopoly of the real estate market by banks and large corporations makes it difficult for the average investor to approach, let alone climb the property ladder, but blockchain is changing the rules of the game. The implication for the housing market is astronomical when considering the housing crisis following the real estate crash of 2008. While costs in the traditional real estate market remain astronomically high and rising, blockchain offers a more equitable and accessible solution to the housing crisis.

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