Real Estate Industry
Introduction of the industry including the size/market share:
The Real Estate Services industry involves the appraisal, brokerage, managing and leasing of residential and commercial properties, or a combination of the two. Government incentives and record-low interest rates have supported growth in residential housing prices over the past five years, benefiting industry revenue. Industry revenue is forecast to continue growing over the next five years, along with residential housing prices. Price increases are likely to place downward pressure on mortgage affordability. This, coupled with increasing urbanisation, is likely to boost renting rates, benefiting operators that provide property leasing and management services. However, the forecast incremental increase to the cash rate has the potential to limit industry revenue growth. Residential housing loan rates are likely to increase, limiting the number of buyers in the market. Overall, revenue is forecast to grow at an annualised 0.6% over the five years through 2026-27, to $33.2 billion.
Impact of the current problem
- Cyber attack: Real estate firms oversee large, complex transactions involving extensive sensitive client data. As a result, companies in this industry are a favorite target among cyber criminals. Email is a popular and convenient method of communicating with clients, but without critical additional defenses, cloud email also provides threat actors with an access point to your confidential information. Ninety-one percent of attacks are initiated with a phishing email – and a successful cyber attack often results in the compromise of critical data and the loss of hard-earned client trust. Reputation is everything in the real estate industry, and can be permanently damaged with one wrong click.Property settlement scams are becoming more and more common now that house prices are at record-highs.
- Need For Intermediaries: Intermediaries make it easier for buyers to find what they need, they help set standards, and they enable comparison and efficiency improvements that keep markets working smoothly. However, they can also capture a disproportionate share of the value the real estate companies create.
Solution with A2B
- A2B Templates require no coding: Blockchain-based platforms are also starting to emerge that allow users to buy and sell property without using traditional intermediaries. This could further reduce the costs of buying and selling property and make the process even more efficient. The parties involved could just answer the questions in the template and the information will be stored on the blockchain.
- Affordable & Accessible: A2B can act as their own escrow autonomously. Executing transactions over the blockchain could eliminate the need to hire several professional services that thrive on facilitating deals. As a result, those dealing on the blockchain won’t have to pay the exorbitant fees that have become synonymous with escrow agencies. Instead, each side of a deal may trust the algorithms carried out by nodes across the advanced computer network that houses the blockchain.
Benefits
The real estate market consists of many siloed and independent networks with transactional friction and opacity between existing systems. The blockchain presents a practical solution to realize the following industry benefits:
- Process efficiency for underlying industry operations
- Reduced costs from process automation
- Access to global asset distribution
- Access to broader investor pools due to ownership fractionalization
- Data accessibility to increase transparency and inform better investment decisions and portfolio management
Opportunities
- Gain direct customer as no need for intermediaries
- Blockchain can help streamline the process of buying and selling property, as well as make it more secure.
- Open up new opportunities for investment and help to democratize the real estate market.
Conclusion
Blockchain helps the real estate industry to provide ownership rights efficiently, eliminating the paperwork, bureaucracy and expense while guaranteeing transparency. It also helps participants in the real estate sector records, legal contracts, and other types of information over a safe and secure network. It allows almost all components of a transaction to transition from the antiquated processes we currently have in place to online protocols with a lot more scalability, speed, optionality, and security.
