What a blockchain-driven real estate industry could look like     

       

There has been much talk about blockchain and its potential to disrupt different industries, including real estate.

Why is this technology so appealing? Blockchain can decentralize transactions and remove middlemen. In its purest form, it is like a digital ledger where users can record transactions that cannot be censored and can be accessed by the public. These records on blockchain may include specific property-related information such as ownership details, addresses, and encumbrances.

Just imagine how cryptocurrency property titles can be stored with all your other material possessions in your own secured digital wallet. Disposing these assets could be easier through a secured online marketplace where transactions are verified, tracked, and recorded on the immutable blockchain.

But why is this change important?

Blockchain can help facilitate for quicker, more reliable, and cheaper transactions for homeowners and home seekers. The transactions in the industry have been cumbersome, opaque, and expensive, with the participation of multiple middlemen—brokers, land title offices, conveyance law firms, and the like. More often than not, these middlemen hold certain pieces of information that are needed to close a deal. By introducing blockchain to the real estate industry, bureaucracy can be eradicated.

Take buying property for example. From the sales process, checking the last transacted price point, interacting with owners, to checking the legal title of the property, all these actions are done by different parties or intermediaries. And it takes several months and thousands of dollars just to facilitate a sales and purchase transaction! Wouldn’t it be nice to save all that time and money with just a click of a button?

With blockchain, all you need to proceed with a transaction is a coded smart contract that factors in your interests, financing requirements, underlying legislations, and cryptocurrency to make that exchange. And if you really like the property, buying it is literally just a “click” away. Organizations in Europe and the US are already experimenting with real estate transactions through blockchain—and it’s working!

Sounds too futuristic for comfort? Maybe. But that doesn’t mean we turn a blind eye to the implications and benefits that this technology offers.

The transition and its impact on Singapore’s real estate industry

Like it or hate it, technology advancement is here to stay. With the recent shift in our lifestyles, people expect technology to make their lives easier. The on-demand needs of a customer is now shaping how businesses are re-imagining and coming up with innovative products and services.

The government here in Singapore has taken bold and decisive steps to invest in technology as it further pushes for our Smart Nation strategy. Leading by example, the government has committed to improve and simplify its e-services platforms. By the same token, the real estate sector gets its own Industry Transformation Map (ITM) that’s focused on raising productivity, gaining new skills, and entering into growth arenas.

We may soon see shorter waiting times and a simplified process to buy or sell an HDB resale unit, which means moving into your new home or receiving your sales proceeds is a whole lot faster. The underlying technology may just be blockchain-driven.

But applying technology and achieving efficiencies may also mean manpower displacements, reallocation, and retraining, and new learning opportunities—something that the government has also laid out in the ITM—as we embrace the changes.

There have been several discussions about real estate salespersons potentially bearing the brunt of the transition, and with technology and DIY real estate platforms disrupting this space, the profession is under threat. Such an evolution may be a refreshing change for the industry as better real estate salespersons will embrace new technologies and evolve into “private bankers of real estate”, becoming more knowledgeable, efficient, and providing bespoke services and solutions to their clients. Besides, they are already transacting millions of dollars of their clients’ assets. Why shouldn’t they be better skilled and equipped? The regulations for real estate salespersons to take on wealth management and insurance qualifications and licenses may be eased in order to provide a more holistic service experience.

Here in Singapore, where internet connection speeds are among the fastest in the world, technology can indeed be the catalyst that drives our digital economy. However, in order to truly harness its full potential in achieving its promised efficiencies, it needs to embrace and buy into the true core competence of the country—our people.

This is an opinion piece.