Blockchain’s prop­erty role

Money Magazine Australia - - THIS MONTH -

Dig­i­tal tech­nolo­gies are ready to change hous­ing sys­tems in pro­found ways. Our re­cent re­search looked at how blockchain tech­nol­ogy could en­able the crowd­fund­ing of prop­erty de­vel­op­ment, po­ten­tially al­low­ing de­vel­op­ers to at­tract mi­cro in­vestors (pos­si­bly from across the world) who would each own small parcels of shares in the de­vel­op­ment.

This dif­fers from ex­ist­ing real es­tate in­vest­ment trusts in that blockchain to­keni­sa­tion gives mi­cro in­vestors com­plete con­trol over what they pur­chase with real-time in­for­ma­tion, with­out hav­ing to pay the high fees a port­fo­lio man­ager might charge.

An­other pos­si­bil­ity is that blockchain may one day pro­vide an en­try point into the prop­erty mar­ket for those who can­not af­ford an en­tire prop­erty, even al­low­ing ten­ants to own a share of the prop­erty they live in. Giv­ing ten­ants a stake in the prop­erty would in­cen­tivise longer-term ten­an­cies, which would be of fi­nan­cial ben­e­fit to prop­erty own­ers as well as giv­ing the ten­ant some re­turn if the prop­erty is sold.

As these tech­nolo­gies emerge, gov­ern­ments and in­dus­try must strive to im­prove data and pri­vacy pro­to­cols to en­sure the ben­e­fits are shared eq­ui­tably and their harms are min­imised re­spon­si­bly. Michael Fother­ing­ham, ex­ec­u­tive di­rec­tor, Aus­tralian Hous­ing and Ur­ban Re­search In­sti­tute

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