There has been much talk about Blockchain and its disruption potential in different industries. The real estate industry is one such industry that will benefit, due to its potential to allow for decentralised transactions and to disintermediate the real estate sector, i.e. cutting out the middlemen.
Why is the use of Blockchain so appealing? Well, Blockchain is a digital ledger of records that allows users to record transactions, which cannot be censored, and everyone can have equal access to these records (on a public Blockchain). These records on the Blockchain can include property specific information such as ownership details, addresses, encumbrances, etc.
Imagine further that Property Titles just being in the form of crypto currency, together with the rest of your material possessions, all stored in a your own secure digital wallet. Disposing them will then be made easy through a secure online marketplace whereby transactions will be verified, tracked and recorded on the immutable Blockchain.
Sounds too futuristic for comfort? Maybe. But that doesn’t mean that we turn a blind eye to the implications and benefits that Blockchain offers. Organisations in Europe and the USA are already experimenting with real estate transactions through Blockchain and the fact is, its working!
Why is this change important, though?
Blockchain technologies can help facilitate quicker, more reliable, and cheaper transactions for the homeowner and home seeker.
Transacting real estate has always been cumbersome, opaque, and expensive, because of multiple middlemen: brokers, land title offices, conveyance law firms, etc. By introducing Blockchain tech in this sector, we can cut through the bureaucracy. More often than not, these middlemen hold certain pieces of information that is needed to close a deal.
Take for example, buying a property: From the sales process, to the checking of the last transacted price point, to the interacting with owners and down to the checking of the legal title of the property. All these actions mentioned are done by different parties or intermediaries, which take several months and thousands of dollars just to facilitate a sales and purchase transaction of a property! Wouldn’t it be nice to save all that time and money with just a click of the button?
If Real Estate is powered through Blockchain technologies, you’ll be able to know the history of the title, its pre-existing encumbrances, past sales transactions and who the owner is. To proceed with the transaction, all you need is a coded Smart Contract, which factors in your interests, financing requirements, underlying legislations, and enough crypto-currency to make that exchange. Now if you really like the property, buying it is literally just a “click” away.
The transition: What it potentially means for real estate in Singapore
Like it or hate it, technology advancement is here to stay. With the recent shift in our lifestyles, people expect technology to make their life easier. The on demand need of a customer is now shaping how businesses are re-imagining and coming up with innovative products and services.
Our Singapore Government has taken bold and decisive steps to invest in technology as a further drive towards our Smart Nation strategy. Leading by example, the government has committed to further improve and simplify its e-services platforms. By the same token, it was also recently announced that the real estate sector gets its own Industry Transformation Map (ITM) focused on raising productivity, gain new skills and enter into growth arenas.
We may soon see a much shorter waiting period and simplified process to buy or sell an HDB resale unit, which may mean getting to move into your new home or receiving your sales proceeds a whole lot faster. The underlying technology may just be blockchain driven.
Applying technology and achieving efficiencies may also mean manpower displacements and reallocation, retraining and new learning opportunities – something that the government has also laid out in the ITM – as we embrace these changes in this new economy. There have been several discussions about real estate salespersons potentially bearing the brunt of such changes, and with technology and DIY real estate platforms disrupting this space, the profession is under threat.
Such an evolution may be a refreshing change for the industry as better real estate salespersons will embrace new technologies and evolve into “Private Bankers” of real estate, becoming more knowledgeable, efficient and providing bespoke services and solutions to their clients. Besides, they are already transacting millions of dollars worth of their clients’ assets, why shouldn’t they be better skilled and equipped? Maybe the regulations may be eased for real estate salespersons to take on wealth management and insurance qualifications and licenses in order to provide a more holistic service experience.
In our little City State of Singapore where internet connection speeds are amongst the fastest in the world, technology can indeed be the catalyst that drives our digital economy. However, in order to truly harness its fullest potential in achieving its promised efficiencies, it requires the embrace and buy-in of the true core-competence of the country – Our People.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your post here.
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