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Crypto and real estate, a market in consolidation

Crypto and real estate, a market in consolidation2 min read
  • 12 May 2023
  • by UH News

The growing use of cryptocurrency and the possibilities opened up by tokenization are bringing about a revolution in the global property market, partly because they can eliminate obstacles to loans and many requirements that banks impose when it comes to buying real estate.According to Forex, Spain leads the way in terms of the number of properties available to buy using crypto, with 289. It’s followed by Thailand with 227 and Portugal with 130. In other countries, such as Venezuela, property transactions have also been conducted through exchanges. The buyer pays in crypto, and the estate agent receives the payment and records the document in the register.

As for which countries have the most expensive crypto properties, the prices going in Canada double those in its closest competitor, the United States. The average price of a property in Canada is 248 bitcoins, while in the US it’s 112. In contrast, countries like Panamá have properties available at an average of 53 bitcoins. The Philippines is the cheapest market, with an average price of 15 bitcoins per property, followed by Mexico at 23 and Holland at 26.

The popularity of crypto real estate has led some agents to list pages of properties available all over the world. The cryptocurrencies that are most accepted for transactions include Bitcoin, Litecoin, Ethereum and Tether.

The benefits of buying property with crypto

The biggest benefit is that the parties involved can avoid the commissions charged by banks as well as certain bureaucratic formalities. In the US, for example, such commissions can often reach between 2% and 6% of a property’s value. That means that if you buy a house that costs $350,000, you have to be prepared to pay between $7,000 and $21,000 to cover the costs of closing.

By paying in crypto, people can save on much of this additional cost, and transactions are faster. These benefits have led to million-dollar sales being conducted in crypto in cities like Miami, which has seen a property boom in recent years.

The tokenization of property

The blockchain technology that underpins cryptocurrencies can be used to tokenize physical goods and sell them. The high level of security in the blockchain makes each transaction transparent, which is another of its main attractions.

“When a token is created, blockchain technology generates a unique address, ensuring strong data protection through access control, automatic rights transfer and remote decentralized file storage. Tokenization implies that only authorized users can access the system through unique tokens,” Forbes explains.

Another attractive aspect of tokenization is that it makes it possible to buy fractions of properties, multiplying the investment opportunities for those who don’t necessarily want to invest large sums