Upcoming Trends Of Digitalisation In Real Estate Sector
- IJLLR Journal
- Jun 15
- 2 min read
Kushagr Chawla, O.P Jindal Global University, Sonipat, Haryana
In this article, we will cover how the real estate sector is transforming from one that involves on-site involvement and people’s skills to one that can be controlled digitally. We are going to discuss the various aspects of the real estate sector that are being picked up by this way of digitalisation and are going to completely transform this sector. We will cover in detail the upcoming trends of digitalisation in the Real Estate Sector whose major component is the Tokenisation of Assets, Fractional Ownership of Assets, Real Estate Investment Trusts (REITs), tech platforms and steps by central and state governments to stay in line with these trends.
Tokenisation of Assets is the process of converting real assets into digital tokens which represent fractional ownership of the assets. These assets can be bought, sold and traded through blockchain. Earlier, access to real estate investments was very expensive as one was required to have good quantum of money to enter the real estate market. However, through the tokenisation of assets, one can buy fractional parts of these real estate assets and trade them to reap their benefits. In fractional ownerships, there is lower initial investment and higher liquidity as compared to physical real estate. This would allow every citizen to be a part of this sector and is not restricted to be on the speculator’s side.
With this idea, real estate properties could be traded like stocks in the share market with a natural regulatory body like National Stock Exchange (NSE) controlling these markets. This would open the gateway of the real estate market to retail investors as well. Tokenisation of these assets is straightaway eliminating the concept of primary and secondary markets. Primary markets are markets where assets are issued directly to the general public. Secondary Markets are those markets where investors trade assets between themselves. Tokenisation will allow issuers of assets to directly trade with the public through Initial Coin Offering (ICO). To understand ICO, one can compare it with an Initial Public Offering (IPO) in the share market.
