Real Estate Investor Magazine South Africa July 2018 | Page 16

will be considerable shifts over the coming months and years. At the same time, legal and regulatory changes will be required in order to make all of this possible. Smart contracts based on the blockchain need to be recognised legally and become enforceable. Banking regu- lations need to change to include cryp- tocurrency transactions and lending. Governments will need to get involved to protect consumers.” The bottom line the tokenisation of property. “It plans to carry out its first transaction this year. Complex algorithms create an exchange through which vendors can sell tokens in residential property without needing to find a buyer. This is possible because investors pay for a finite reserve of trad- able tokens on top of the value of the property itself: in other words, a liquid- ity premium. Though the technology determines the pricing of a transaction, this happens within the framework of quarterly valuations by a chartered sur- veyor,” Bill explains. Is this necessarily a good thing? If you’ve been paying a bit of attention, you’d have seen that cryptocurrency is hardly stable. “It is not obvious that everyone wants a more liquid real estate market,” explains Professor Andrew Baum of the Said Business School at the University of Oxford. “If real estate traded more like a stock or a bond, prices might rise due to increased liquidity, but equally they might fall because of great- er volatility and risks. The global bank- ing system has survived over the last decade because it has not been forced to mark property assets to market.” Claudine Cassar Deloitte Digital Malta Leader, highlights yet another application for blockchain technology within property. She points to the be- ginning phase of any property journey: the listing. Through the use of blockchain technology, real estate listings can be decentralised, standardised, and glob- ally accessible. While she is optimistic 14 about the future of cryptocurrency and the blockchain, she’s cognisant of what needs to change: “Obviously there is still a long way to go until real estate exchanges totally transform the world of real estate as we know it. The tech- nologies being used to power these exchanges are still maturing and there One thing experts agree on is the fact that blockchain has the potential to change how we conduct business. Wer- ner Riekert of Traderly equates block- chain to the early int ernet-craze. In the same metaphor, he places bitcoin in the same position as e-mail. At its core, blockchain technology enables greater transparency and collaboration. These are attributes that can be harnessed by SMMEs and give them an advantage previously only known to large corpo- rations. Given the fact that these busi- nesses account for around 60% of South Africa’s GDP, that would be great news for the economy and market as a whole. The changes are happening rap- idly and many won’t be able to see it approach. Positioning yourself at the forefront of learning and technology means you’re able to take advantage of new information - and use it to build your wealth. BLOCKCHAIN AND REAL ESTATE Ian Church, Managing Director - Europe & Russia at AECOM, presents a few possible applications for blockchain within the commercial real estate sector. Blockchain records who exactly acted in a particular way, and when. It provides a means of comprehensively tracking and ensuring the accuracy of information and can bring considerable value to procedures such as the registry of ownership title. Blockchain could also have the potential to deliver highly efficient investment valuations using anonymised, comparable data. Complex, independent property valuations could become the exception rather than the norm, with elaborate financial due diligence and valuation procedures being replaced by a simple blockchain ledger. The power of blockchain’s cryptographic technology to preserve history has the potential to significantly drive down transaction costs and even add transparency to the property sales process. Allowing every operational transaction to be time-stamped, verified and allocated between tenants automatically, a live Service Charge recon- ciliation 365 days a year, 24 hours a day, all at the click of a mouse, is a powerful promise. Blockchain is also revolutionizing physical access control systems by offer- ing access via GPS enabled smartphones. This provides an unquestionable audit trail across worldwide property portfolios, accurately recording who was where, and when – letting the right people into the right locations. JULY/AUGUST 2018 SA Real Estate Investor Magazine THE FUTURE OF REAL ESTATE CAPE TOWN Date: Tuesday, 11 September 2018 Time: 08h00 - 16h00 Where: Spier wine estate, Stellenbosch JOHANNESBURG Date: Thursday, 13 September 2018 Time: 08h00 - 16h00 Where: Radisson Blu, Sandton RODE-REIM REAL ESTATE 2018 Hosted by BOOK NOW @ www.rode.co.za | www.reimag.co.za Lynette Smit Email [email protected] Tel [phone] 946 2480 Johannesburg Headline sponsor Sub sponsor TRENDING