Real Estate in The Metaverse - Not impacted by Russia/Ukraine

The question might be asked, is the Metaverse would ever mirror the issues that we witness in the real wolrd? Could the real estate industry experience crisis too?

The Future?

We are indeed heading towards the age of the metaverse, virtual realities where we will live digital lives alongside our real lives. The metaverse is a unified virtual world where users can interact with each other, using 3D avatars, and leverage human-computer interactions (HCI) to exchange information with the surrounding 3D world.

Big Players!

Metaverse real estate (or should that be virtual estate?) is already big business. Global businesses including PwC, JP Morgan, HSBC, and Samsung, have already got themselves plots of virtual land, which they intend to develop for a variety of purposes. Those who got in early have already made significant returns, on paper. Less than a year ago, the average price for the smallest plot of land available to buy on Decentraland or the Sandbox – two of the biggest metaverse platforms – was under $1,000. Today it’s sitting at around $13,000.

Investors have spent millions of dollars buying land in the Metaverse over the last few months. There is no denying that the technology has transformed how real estate operates, and there are even mortgage providers and lenders catering to customers buying digital real estate, leading to five key implications.

So, is this another chance to pick up the hottest and newest digital assets before they blow up? Like buying Bitcoin 10 years ago or NFTs two years ago?

So is it safe ? Is it reality-proof?

Short answer is no!

This is an important question, does whatever happen in the real can also impact the market in the metaverse? Inflation, wars etc. If you plan on putting up big money, this is a must know! Buying virtual land is certainly a high-risk investment, just like buying into cryptocurrencies and NFTs. For a start, the market is largely deregulated, meaning if anything goes wrong – such as a seller turning out to be a con artist and disappearing with your money – the channels for seeking restitution are undeveloped, and you may find you’re on your own.

There are technical considerations that can add an extra layer of risk, as transactions are carried out in cryptocurrency and NFTs, you need to be confident that your store of value is safe. No need to mention what happened to Luna UST or the volatility of the cryptomarket.

Another consideration is the issue of scarcity. Real-world land has consistently increased in value largely due to the fact it is a finite resource, and the population of people with an interest in owning it is constantly growing. In the virtual world, the amount of land available is potentially unlimited. If all of the virtual plots of land on a platform are sold, but there’s still demand from buyers, there’s ultimately nothing to stop the developer creating as many more plots as they need. The big platforms currently have limits on the amount of land, therefore enforcing "artificial scarcity," but there's no guarantee this will always be the case!

So would you yourself invest or rent an apartment in the metaverse?

The Carey House Real Estate does not offer opportunities in the metaverse... yet. But should this keep generating interest we might offer our clients this possibility. At the end of the day our goals is always to satisfy our clients. Backed by the Grupo Internacional Mackendal, Carey House has all the tools need to guide the public in investment ventures.

In the meantime should you need information guidance assistance to rent, buy orinvest, contact our team and benefit from the best servicesi n the industry.

See you very soon!