Real Estate Investor Magazine South Africa March/April 2020 | Page 13

T
he use of technology by key role players in the
sector is what is set to change the real estate sector.
A sentiment echoed by Deloitte Digital CEO, Peter
Williams that “Real estate agents will not be replaced by
technology but by agents with technology,” as technology
is ready and set for the willing hand to use.
Blockchain
Of the many tech trends within the real estate sector,
blockchain has had the most polarizing effects. Explained
by Blockchain Academy (Pty) Ltd Consultant, Carel de Jager,
as a new and opaque tech trend that is often abused and
sometimes leads to confusion in terms of the technology’s
abilities and limitations.
“On a high level, it is a decentralised, immutable digital
database to which information can be added only if certain
pre-set conditions are met. These conditions, or rules, are
transparent and set in stone. Some clever cryptography
allows for every participant to be in agreement about the
data that makes up a blockchain, with even its greatest
cynics acknowledging this fact,” says de Jager.
“In its essence, a blockchain allows people to embed trust
inside software. By using smart contracts, absolute trust can
be artificially created between two parties, which will allow
them to interact with each other in ways never seen before.
When trust is unequivocal and free, any form of middleman
becomes redundant. The most obvious use cases of this
resource include peer-to-peer digital transacting,” he adds.
Blockchain in residential property
In South Africa, the property sector has been making use of
different tech trends to grow the different industries within
the sector. It has been recently announced that The Centre
for Affordable Housing Finance in Africa (CAHF), research
consultancy 71point4 and Seso Global have worked
together in bringing one of these trends to the residential
property sector, for the general South Africans to benefit,
while assisting the South African government carrying out
a reliable housing department in Cape Town, in the Western
Cape. The companies have partnered to develop South
Africa’s first blockchain-based property register.
The project has been described by the team that initiated
it as the first of its kind, and a project set to bear information
about the rightful owners of the 1 000 properties in Makhaza
township, Cape Town.
“This will be the first working example of a blockchain-
based property registry in South Africa. For the time being,
property owners will record these transactions at the
Transaction Support Centre, a walk-in housing advice office
created by CAHF and 71point4 located in the area. But over
time, we will record transactions through the Seso app,” CEO
of SESO Global, Daniel Bloch.
According to Bosch, the benefit of the blockchain solution
is that it allows the data to be stored in a decentralised,
secure database that can be updated without any loss of
TECHNOLOGY
historic data. This means there is a secure, back-to-back
record of all transactions that is completely tamper-poof.
Eventually the vision would be to integrate this record into
the Deeds Registry when other impediments to transfer
have been removed.
De Jager, the blockchain expert and consultant at
Blockchain Academy (Pty) Ltd thinks that an optimal
blockchain property registry such as this means that there
can be no dispute as to who owns the property.
“Ownership is recorded on an immutable database
and conveyancing will not require lawyers and other
middlemen. A smart contract on a blockchain is also optimal
for supporting other types of automation, like the paying of
subsidies, rent and bonds,” He says.
“Real estate agents will not
be replaced by technology
but by agents with
technology,” as technology is
ready and set for the willing
hand to use.”
The challenges
De Jager believes that there still are some minor challenges
that could be faced pertaining to the use of Blockchain
technology in such projects but also provides ideas on how
these challenges could be countered, challenges such as
regulatory support and data correction.
“Since blockchain technology has the ability to enable
true peer-to-peer trading of assets, there should be no need
for agents, lawyers and government. A complete overhaul
of South Africa’s land registry would require such a major
mindset change that it seems unlikely under our current
bureaucratic regime.”
“Another challenge is correction of data. A permanent,
tamperproof dataset is a ground-breaking invention, but
it has serious consequences should a legitimate historic
change actually be needed. If someone loses his / her proof
of ownership, it might be impossible to recover. Some
complicated social engineering methodologies would be
required to overcome this,” He adds.
South Africa has a serious titling problem, and according
to the Centre for Affordable Housing Finance Africa (CAHF),
of the more than three billion houses built by the South
African government since post 1994, only 1.9 million of
these are have been registered.
CAHF CEO, Kecia Rust says “The National Department
of Human Settlements, Water and Sanitation (NDHSWS)
SA Real Estate Investor Magazine MARCH/ APRIL 2020
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