Blockchain technology has revolutionised various industries, and the real estate sector is no exception. Its decentralised nature and secure data storage have significant benefits. Furthermore, it has enhanced property transaction processes. The impact of blockchain in the real estate sector is ever-lasting.
With tamper-proof property records, reducing fraud and improving trust between parties involved, the smart contracts powered by blockchain automate and streamline complex processes. Besides, minimised paperwork and secured documents make real estate investment safer.
Let’s learn about the influence of blockchain in the real estate sector and how it will benefit the industry.
How Will Blockchain Help the Real Estate Sector?
Blockchain technology continues to improve processes and data handling. With secure transactions, real estate investors will be at ease. That said, the market’s sentiment will always be positive, allowing more investors to buy properties in the UAE.
In Gitex 2017, the Dubai Land Department (DLD) announced the use of blockchain technology in real estate transactions. As part of the Smart Vision, DLD became the first government entity to implement blockchain technology in the real estate sector.
Let’s go through the details of the impact of blockchain in the real estate sector.
Transparency and Immutability
As a decentralised and immutable ledger, blockchain allows the storage of transactions and property records. It ensures transparency and reduces the risk of fraud. That said, property records, titles and ownership history have safe storage. Plus, blockchain makes the verification process for the authenticity of properties easier.
Smart Contracts
Smart contracts, self-executing ones, have terms of the agreement between buyer and seller directly written into lines of code. They automatically execute when the conditions specified in the contract are met. As an impact of blockchain in real estate, this means the transfer of property ownership in Dubai or other emirates, payment and other processes are automated.
Faster Transactions
Traditional real estate transactions can be time-consuming due to the involvement of multiple parties, paperwork and verification processes. Blockchain can streamline these processes, making transactions faster and more efficient. Buyers and sellers can interact directly, reducing the time it takes to close a deal.
For example, Emirates Real Estate Solutions (ERES) introduced software, such as Oqood, by joining hands with DLD. The Oqood system helps manage the off-plan real estate transactions between buyers and sellers easily.
Fractional Ownership
Blockchain introduces the concept of fractional ownership. Multiple investors can buy and sell fractions of a property, making real estate investments more accessible. Smart contracts can automatically distribute rental income or sale proceeds among fractional owners. Mollak in Dubai is an example of this. It is a system where stakeholders can manage jointly-owned properties in Dubai easily.
Reduced Fraud
With cryptographic features and a decentralised nature, the impact of blockchain in the real estate sector will reduce the risk of fraudulent activities. For instance, property title deed fraud and identity theft will be reduced significantly. Once you enter the data on the blockchain, no one can edit it without consensus from the network participants.
That said, it will reduce fraud and identity theft. Furthermore, it will make processes simple and protect the people’s assets. Users can also follow the procedure to verify the title deed via the Dubai Rest application reducing the risk of fraudulent activities.
Cost Efficiency
By reducing the need for intermediaries, paperwork and manual verification processes, blockchain can significantly reduce transaction costs in real estate deals. Furthermore, it will be particularly beneficial for large transactions involving commercial properties. As a result of the impact of blockchain on the real estate sector, investors and companies have to pay lesser fees for the processes.
Global Transactions
Facilitating international real estate transactions, blockchain technology makes the process of buying properties as a foreigner in Dubai easier. By removing the need for multiple currency conversions and complex financial procedures, the real estate sector has witnessed constant growth. Additionally, smart contracts ensure that all parties involved receive their due share in their respective currencies.
With several freehold areas in Dubai and the impact of blockchain in the real estate sector, property transactions are made easier and safer.
FAQs
How Is Dubai Using Blockchain Technology?
Dubai is actively using blockchain technology in several sectors, including real estate, supply chain and tourism. As per the Digital Dubai and Dubai Blockchain Strategy, all government processes, industry creation and leadership will become easier with the benefits of blockchain in real estate and other sectors.
What Is the Blockchain Plan in Dubai?
The Dubai Blockchain Strategy is all set to be the leader in Global technology. From government processes to larger real estate transactions, blockchain in Dubai will guarantee economic growth, and users will enjoy seamless and safer transaction processes.
Is Blockchain Legal in the UAE?
There are no legal challenges to blockchain technology in real estate in the UAE. After DLD adopted it, the transactions are safer. Plus, the real estate market has grown significantly since then.
This concludes the impact of blockchain in the real estate sector. When you buy an apartment or villa for sale in Dubai, you can be assured that the transactions are safer and the processes are seamless.
Stay connected with the dubizzle property blog as we bring you more information on how UAE’s real estate works.
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