You sure noticed it. Last year, the savings rate halved. Savers received on average only about 0.5% interest. And the future does not look good in this area. With these low interest rates, everyone looks for alternatives to the “trusted” savings account. But are there any? Is real estate a possibility?

Real estate

Investing in real estate. In the year 2020 it is an interesting investment class. Especially for the rich. Worldwide, the total value of this class is estimated at around 300 trillion dollars. It is the largest global asset class. But how do you do it if you are not able to purchase an entire property, for example? At an average purchase price of around €300,000 in the Netherlands investing in real estate is not for everyone.

Real estate investment funds

Real estate investment trusts (REITs) have been around since 1960. These REITs allow investors to buy “baskets” of real estate shares and trade them. The disadvantage is that, as an investor, you do not have any personal choice in terms of which property to invest in. You invest in a ‘managed’ fund, in often unknown assets and there is no direct ownership.

It can be different

With the progress of blockchain technology, there is opportunity to obtain ownership of portions of physical assets (including properties) through digital fractional ownership certificates (tokens).  These tokens represent proportionately the value of the underlying real estate. This makes it possible to acquire ownership of pieces (participations) of objects of your own choosing.  For large and small investors. You can own a piece of real estate for as little as 25 euros. And with the help of blockchain technology the return is paid out in real time. You can sell the tokens whenever you want. This makes it possible for small investors to build up a real estate portfolio. And so the property market becomes accessible to everyone. Now that’s financial inclusion!

When will it be available?

The technology is available and all over the world there are expiriments. DecenterX is also working on this technology. It is therefore not a question of whether we are going to get these shared ownership certificates of real estate, but rather when. In addition, national and international efforts are being made to get the right regulations in place. Personally, I think we are going to see the first fractional ownerships in the blockchain as early as next year. And I’ll take a shot ahead of time: real estate transactions will never be the same from 2020 onwards.

Contact us for more informatie.

  Erwin Giesbers

17 Responses

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