The region’s first real estate brokerage with a footprint in the metaverse

By Marc CastleyDirector of Operations,

SIt used to be that jumping was a simple but tedious process – you go to a store to pick up what you want to buy, select the items you want and put them in your bag, pay for your items at checkout, then go home. The internet and digital connectivity has shortened this whole process to just a few clicks (or a few taps of the screen, in most cases these days) so you can buy groceries, meals, and whatever else you want. without even leaving the couch. But this is only the first step in a digital transformation – after all, why stop at physical products when you can also buy virtual assets?

The metaverse is an idea that’s been around for decades – the term was originally coined by author Neal Stephenson in the 1992 sci-fi novel “Snow Crash” to represent a virtual reality world – and has taken on new life. at 21st century where the boundaries of the real world are smaller than ever. With the rise of cryptocurrency and, more recently, NFTs, today’s market offers a mix of real and virtual products that can be purchased with real and virtual money. The next frontier of the metaverse? Virtual real estate.

This term probably conjures up images of Monopoly houses or “houses” available for purchase in video games, but as fantastic as it sounds, virtual real estate is gaining traction all over the world and is a growing industry. . But what is it? Simply put, virtual real estate is property (or a parcel of land) that exists in a digital domain (The Sandbox and Decentreland are two of the best known) without a physical component. It is actually the NFT form of real estate and can be purchased using a digital wallet.

And now, in 2022, after making a splash in the North American market, the metaverse is expanding its reach to the Middle East through New York, one of the international outposts of highly acclaimed brokerage firm LuxuryProperty. .com, based in Dubai.

I oversee operations across the New York office, and we want to take the regional real estate market to the next level. There are several different factors at play here which I think can combine perfectly. Real estate activity in major regions of the world is trending upwards and demand for real estate is currently at an all time high. We can also see a growth in cryptocurrencies and digital assets – once considered fads, they are now just as valid in a transaction as a credit card or bank transfer. The coming together of these two forces is inevitable, and virtual real estate has the potential to be huge in several major cities in the Middle East.

Does the concept of buying, selling and owning virtual real estate sound weird to you? Maybe, but as many tech experts will tell you, even the idea of ​​using your phone as an all-in-one tool to manage your daily life was once considered absurd. And indeed, any new technology in its infancy attracts a sideways glance from most people. However, it’s important to understand how the market is moving, so you don’t get left behind. The accumulation of digital assets is an idea that seems quite obvious to those who already have both feet firmly planted in the online world – we’re talking about people traversing vast virtual realms using digital representations of themselves. called “avatars”, and of course these avatars would need a place to stay. Or even a place they could buy and return to in a few months.

Interestingly, metaverse real estate was also a component introduced in “Snow Crash”, but it really took hold as a concept in 2020 when the whole world was cut off from itself and tried to cross paths. borders that were only 2 meters wide. Unable to get out much in real life, many people have turned to virtual words to satisfy their wanderlust and have found an increasing number of options to choose from. After Facebook rebranded itself as “Meta” last year and effectively launched its own metaverse, it gave the idea a new sense of legitimacy. The result has been the blossoming of a niche market into something almost bordering the mainstream.

Several North American brokerages that deal exclusively in the metaverse saw prices rise 400-500% by the end of 2021 – plots that sold for hundreds of dollars just a few months ago are worth it now thousands. This is a level of growth that real estate in some of the world’s largest markets has not seen in the last decade. Grayscale, a leading virtual asset manager, estimates that the digital market could be worth $1 trillion in the near future. It’s the next step in a grand vision that blurs the lines between the physical and the digital, creating an interconnected world in more ways than one.

“This is really an emerging sector of the market, and one that we need to capture early on,” says Riccardo Scala, who will lead metaverse transactions for New York. “Virtual real estate has the potential to be huge, and any brokerage that understands this space and knows how to operate in it will open up a significant additional revenue stream. We are currently accepting expressions of interest for luxury real estate in the metaverse and aim to grow this side of the business over the course of this year.

Could digital real estate ever be sold in Dubai? “The possibility is definitely there,” says Mark. “The UAE has always looked to the future and to be at the forefront of new technologies – significant investments are being made in developing robust blockchain infrastructure and improving AI capabilities. Dubai is well on its way to fully becoming a ‘smart city’, where every aspect of life is seamlessly integrated through technology. I think that one day we could consider selling Palm Jumeirah virtual villas in the metaverse and giving awards for the best virtual sales broker, but the necessary legal and judicial frameworks will have to be established first. We might not see that happen for a few more years.

The metaverse is on the fast track to growth, but investors in this space should watch their move carefully. Virtual assets are volatile and subject to much speculation, a fact that is underscored by the ups and downs of cryptocurrencies like Bitcoin and Ethereum. “All investing involves some level of risk, and virtual real estate is no exception. In fact, the risks are higher due to the nature of this market. You have to be absolutely sure that this is something in which you want to invest,” says Riccardo.In many ways, the risk factor can be seen as a positive because it will ensure, in the short term at least, that only the most serious and knowledgeable buyers will go down this route.