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Real Estate: How tokenization will revolutionize the real estate market

The digitalization of the economy is already a real concept in Brazil and in the world. With the token revolution, this business model is bringing more and more agility and security to operations, whether they are for consumption or investments. In this scenario, the real estate market, one of the drivers of the Brazilian economy, could not be left out.

In a market that moves almost R$100 billion per year in General Sales Value (VGV) in Brazil, this digitalization of business is becoming increasingly heated. According to the Markets and Markets consultancy, the segment should jump from $2.3 billion in 2021 to $5.6 billion in 2026.

The token transforms a physical asset, such as real estate, into a digital asset that is traded on the web through encrypted networks, usually blockchain. And as business is increasingly digitized, the tokenization strategy is not only necessary, but vital for the real estate market.

Real Estate: the transformation

No one doubts two things: the complexity of the real estate market and that it is a thermometer of the economy. High sales mean recovery; low sales, concern.

óthis is all directly related to the complexity of trading assets. The resilience of the real estate sector closes this equation. That is, the ability to adapt to new situations, from pandemic to digital transformation. This is where tokens come in – an alternative for companies and professionals in the sector to expand their activities, also making it easier for new players to enter this ecosystem.

The growing adherence happens because tokenization of the real estate market solves two problems at once. The first is the agility in sales.

This is because the token represents a fraction of the property. Therefore, it is easier to sell it, because the investment can happen in smaller contributions. This allows the buyer to gradually acquire the remaining fractions until the entire property is acquired.

This process simplifies the dealings between buyer and seller, dispensing with more in-depth credit analysis. Not only because of the reduced amount of financial investment involved, but also because they are carried out without financing or with own resources. In addition, the company can quickly raise the money to complete the work, while the traditional way can usually take months.

The second bottleneck addressed by tokenization is the ability to expand market. In a scenario in which 87% of the Brazilian population considers their biggest consumption dream to be home ownership, according to Datafolha, by attracting those who would not be able to invest in real estate due to these fractional values, the token expands the ecosystem, the business possibilities, and brings people and companies closer together.

Real Estate Revolution

Although historically conservative, the real estate market has seen these advantages and is breaking traditional patterns by introducing disruptive technologies and innovative business models. Besides making life easier for entrepreneurs and popularizing the dream of home ownership, the model puts the sector on another level globally.

With this rapid adhesion due to the advantages of the market, the legislation now needs to define the parameters with the Securities and Exchange Commission (CVM) and the Central Bank to expand the injection of liquidity into this sector, replicate secure solutions through Decentralized Finance (DeFis) and define the limits of the regulatory agency’s actions, indicating possible ways to regulate, inspect, supervise and discipline market agents.

The fact is that the tokenization of real estate assets is transforming the way of acquiring one’s own property and making dreams, once distant, come true for a large portion of the Brazilian population, showing that we are facing a true revolution in the way of acquiring real estate through blockchain.

Today, there are companies with innovative projects within this proposal. Properties throughout Brazil are already emerging with affordable, out-of-the-box possibilities. The options for real works are multiplying every day and, consequently, Brazilian web 3.0 actions enter another international level.

Source: Money Times

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