5 Impact Blockchain Technology will have on the Real Estate Industry in AfricaKehinde LAWAL
Real estate simply means real or physical property in form of land, buildings, air rights above the land and underground rights below the land. Since the real estate sector is more established in some countries than the other, it’s impact on the Gross Domestic Product strongly varies from country to country. In the US, it contributes 7 percent or $1.3 trillion to the economy, while in Nigeria, it contributes about 4.3% to the economy.
It is quite easy to start investing in the real estate market, since it doesn’t require much technical expertise. Most traditional investors even prefer investing long term in real estate over stock exchange, simply because it’s a lucrative business and it’s a physical asset that appreciates over time. In short, it’s quite certain that people will continue to rent and buy houses.
Amidst all the positive and attractive investment opportunity incumbent in the real estate market, the industry also has its downside, some of which are:
- High cost of actually acquiring real estate.
- Inability to have a single permanent database of property information.
- Corrupt Practices by government
- High transaction fees due to greedy middle men.
- Slow transaction process etc.
However, the Blockchain Technology, which is a form of decentralized open ledger has the capability to proffer sustainable solution to the catastrophe facing the real estate industry.
Benefits of Implementing Blockchain Technology in the Real Estate Industry:
- Improvement in Property Search: By having all the data about properties on the Blockchain, every transacting party would be able to source and verify any information they need almost immediately.
- More Transparent and Faster Real Estate Transactions: A very cogent characteristic of the blockchain is that it makes transactions more transparent and relatively faster. If all the required information/services are accessible on the Blockchain, and payment are done through the Blockchain, it is without doubt that real estate deals will be more transparent and fast. Home buyers and tenants will find it easier to pay using payment integrated on the Blockchain etc.
- Cheaper cost of acquiring Real Estate: Implementing Blockchain in the Real Estate industry will definitely remove middle men and unnecessary intermediary cost, this will in turn reduce the cost of acquiring real estates.
- Reduction in scams: When Blockchain is implemented, scams such as: falsifying data, selling someone else’s property and payment scams will be significantly reduced. This will be as a result of transactions being backed by smart contracts, payments been made on the Blockchain, and information/record being validated on the Blockchain. Scamming will be nearly impossible, as it could all be traced.
- Immutable record stored on the Blockchain: The record of data and transactions made on the Blockchain will be permanent and can’t be changed. This will tackle corruption issues, popular in most African countries like Nigeria and the world over where government can change records of land allocated for industries for residential purposes simply because of their selfish interest.
Notable Companies Currently Providing Blockchain Solutions in Real estate.
Though we have a couple of companies interested in using blockchain technology to solve problems in the real estate industry, only a few actually have the required expertise to proffer such bogus solutions.
Propy seams to be leading the pace, with a prototype feasible at www.propy.com. Their experienced team, advisors and network had given them the skill sets needed to build such platform on the blockchain.
Since this is still new, very soon, propy will help us bring this dream into fruition.
Dear reader, at this point, I leave you to think about it, question it, but don’t ignore it.