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 082 323 5799
021 946 2480
Johannesburg Headline sponsor
Sub sponsor
TRENDING