Real estate is known for being an industry that's slow to transact, with every deal requiring the parallel or linear workflows of a number of parties – legal, title, appraisal and finance – and the challenges of making this work happen quickly is a contributing factor to the illiquidity of real estate as an asset.
But for many, including Jeffrey Berman, General Partner at strategic venture capital firm Camber Creek, blockchain could be the technology that finally changes this.
"When I was a kid, if my father wanted to trade stock he'd call a broker, who would call the market maker, who would call the trading floor to execute the trade, and there was a disconnect at every step. And that's similar to how real estate transactions work," he commented at the RICS World Built Environment Forum Summit 2019 in New York.
"Blockchain, as a technology creating that ledger of truth, will allow those systems to sync in an interconnected and simultaneous manner, much in the way that today if you want to buy some Apple stock, you can do it on your phone. That's the future of liquidity in the real estate market."
Most applications of blockchain today focus on tokenisation – splitting a built asset into tokens that can be traded using the technology. However, for Berman, we are not yet at a point where anyone can make that a meaningful reality: "I believe tokenisation is important but until there's a universal exchange all we're creating is tech structures, and that's not necessarily going to create the value and liquidity that we'd like to see."