Author: Peter Rose
Cryptocurrencies are going mainstream fast and another decade may see commercial property buyers and sellers using them to transact, as a matter of course.
While bitcoin, the best known of the 3000-odd online monetary exchanges currently active, remains popular with cyber-criminals and other individuals seeking to do dubious deals, its reputation has been undergoing rehabilitation in recent times.
It’s now legal tender in El Salvador and is being included in the investment strategies of institutional investors (and earning decidedly tidy returns for their shareholders and members too).
And it’s being accepted as payment by a small but growing number of residential property sellers, at home and abroad. Upmarket houses have been put up for Bitcoin and Binance Coin auction here in Australia and properties listed for sale with price guides in both dollars and Bitcoin.
It’s the same story in the US.
Residential buyers and sellers are doing deals digitally from the east coast to the west, while across the ditch in New Zealand, some new home builders are fixing up the tradies in bitcoin, rather than bank transfer or good old Arthur Ashe.
When it comes to real estate transactions, there are clear benefits associated with a system and a currency that enable buyers and sellers to exchange titles and funds safely, economically and fast.
The current system falls short on all of these fronts. Settling on a property is expensive and painful, with multiple parties – lawyers, banks and estate agents – playing a part and commanding a cut. Dealing in digital currency could allow buyers and sellers to dispense with some of their services and save themselves a tidy sum in the process.
What’s good for residential players may be just as good for the commercial property sector.
The size of the deals and the sums involved may be greater but, at bottom, it’s the same transaction – and the opportunity to cut costs is equally compelling for institutional investors as it is for the mums and dads.
Also on the cards is the emergence of a cryptocurrency that’s custom designed for the property industry; perhaps one that incorporates additional safeguards, given the six to ten figure sums transactions generally entail.
A long way before it morphs from the fringe into the mainstream some might say but consider this: it’s been just 10 years since we started to hear about bitcoin et al, yet these digital assets are now widely known and readily accepted in many quarters.
While conservatism is a hallmark of the property industry, those who ignore the digital technology that underpins these emerging currencies and the value proposition they represent may be in danger of being left behind, as the rest of the business world continues its pivot to digital.
ABOUT FORBURY
Forbury software exists to solve an industry problem: how to quickly and confidently determine the value of property assets. Forbury tools are user-friendly, intuitive and take the complexity and time-consuming nature out of property investment modelling, while empowering customers to cover more of the market without additional resources and expense.
Valuers use Forbury to provide external valuation to building owners. Agents use Forbury to provide due diligence on a purchase and property owners use Forbury to assess the value of new assets and the development of existing assets as well as to forecast cash flows.
Forbury customers include Colliers International, CBRS, Dexus, GPT Group, Cushman & Wakefield, Lendlease, Savills, Stonebridge, Centuria and Cromwell.
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