The Virtual Real Estate Boom

Jaanki Thakrar
2 min readJun 19, 2022

Property prices globally have been rising fast, accelerated by low interest rates and availability of credit. However, the same thing has been happening in the Metaverse — prices for land have surged this year. Why have prices for ‘virtual property’ risen?

Image: CoinTelegraph

As hype around the Metaverse has grown recently, many companies and individual investors are scrambling to grab space in what could be the future of the internet. PwC for example, has bought land within Sandbox (a platform in the Metaverse) in 2022 where it intends to create an advisory hub in the Metaverse to facilitate virtual professional services including accounting and taxation. Many celebrities have also jumped on the bandwagon. For example, Snoop Dogg has so far bought 122 plots of land, building a recreation of his Californian mansion to host exclusive parties.

How does the concept of ‘property’ work in the metaverse? There are four platforms within the Metaverse known as Decentraland, The Sandbox, Cryptovoxels, and Somnium Space. Space on these platforms is limited and this means someone can buy a plot of land which is then exclusively theirs to rent out or sell in the future. As in the real world, the higher the demand for a particular plot, the higher the price.

Property is purchased through cryptocurrencies — typically Ethereum, SAND, which is a cryptocurrency connected to The Sandbox or MANA which is a crypto connected to Decentraland. Sale of property and ownership is registered via a transfer of NFTs. This transfer requires a secure wallet, in order to hold the digital assets, e.g., Metamask.

Estate agents and mortgage lenders have already popped up online for property owned in the metaverse. For example, OpenSea allows owners to list their property and for buyers to negotiate prices to purchase. A firm called TerraZero Technologies Inc. has also issued the first mortgage to buy a property in Decentraland and this could just be the start.

The ability to purchase land in the Metaverse could open up a range of opportunities for other businesses to operate within the Metaverse — in particular, pop-up estate agents within the Metaverse, other mortgage brokers and law firms.

The use-case of property in the Metaverse seems unclear, since one of the main characteristics of real property is tangibility. Currently, the value of property in the Metaverse is based on how popular people think it will become in the future.

Is it only a matter of time until we start seeing boundary disputes within the Metaverse? Whether this is a speculative bubble or not, only time will tell.

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