The luxury real estate market is on a growth path after a strong stagnation between 2020 and 2022 and the tokenization of assets will be crucial to boost the liquidity and profits of those who offer and also those who invest in this niche.
Evidently, we are talking about a smaller slice of the real estate market in terms of units, but it moved BRL 2.5 billion in the first half of 2023, a growth of 39% compared to the same period in 2022.
The prospects are for maintaining good performance in the coming years, as sales depend on a public where financial resources are not a problem, especially for cash sales.
On the other hand, real estate transactions are not agile in the traditional market, in addition to bureaucracy and strong regulation for operations.
Tokenizing luxury real estate is an excellent way to accelerate business without losing profitability and, above all, to buy or invest in real estate safely.
BLOCKBR, a company that develops tokenization infrastructure, will talk about the state of the luxury real estate market and how business tokens can make a difference!
LUXURY, SUPER LUXURY AND HIGH STANDARD PROPERTIES: WHAT ARE THE DIFFERENCES
The luxury real estate market is made up of three types of properties. How to differentiate them when finding out about offers for acquisition or real estate investment? Let’s talk about three criteria that can help, among others.
PRICES
A high standard property is in the range between R$ 1 million and R$ 1.5 million, a luxury property ranges from R$ 1.5 million to R$ 3 million and for super luxury properties the sky is the limit!
OVERALL DIMENSIONS
The larger the luxury property, the higher its category. Compact luxury properties, 20m² to 40m², are an exception, as they aim to serve a very specific customer profile – they are preferred by many digital influencers, as they combine luxury, urbanity and many amenities.
EXCLUSIVITY
Exclusivity is the essence of a property in these categories and some factors define the category of a luxury property: location, architectural style – a work signed by an architectural authority – and uniqueness – the more unique, the more valuable.
Token economics: the guide with everything you need to know!
TRENDS FOR GROWTH IN THE LUXURY REAL ESTATE MARKET
The volume of luxury property launches in the 1st quarter of 2023 appears to be small when compared to the general total of units – 7.8% with 2,500 units – but it is already a much higher result than the 4.6% in the same period of 2022.
The pandemic in 2020 and the recession in 2022 curbed demand for high-end and luxury real estate and more as a matter of confidence in the direction of the economy – job stability or the impacts of crises on business – than cash problems.
After all, in this niche, money is not a problem, whether due to socioeconomic conditions or the ability to form good financial reserves with investment in fixed or variable income.
In the first half of 2023, there was a 14.9% growth in business volume compared to 2022 and a growth in foreign investment, especially from Europeans and Russians wishing to undertake in a safer region than the one triggered by the Ukrainian War.
The civil construction sector sees the demand for luxury properties as strategic, as it is in this niche that the greatest profit potential is found.
FINANCING HELPS THE SECTOR’S RESULTS
Even if available capital is not a problem for the vast majority of customers in the luxury real estate segment, financing is becoming more attractive, as investments in financial assets yield more than the cost of credit.
This is yet another context that helps boost sales of high-end properties in Brazil.
HOW LUXURY PROPERTY TOKENIZATION WORKS
Tokenization is the representation of real or intangible assets, rights, products, services and projects through an encrypted digital file – the token – developed on a blockchain.
Instead of advertising a property on the usual sales channels, it is offered on a token marketplace, bringing a series of benefits to those who want to trade luxury properties and those who want to invest in an asset with excellent prospects for appreciation.
HOW DOES REAL ESTATE TOKENIZATION WORK?
- The builder, developer or a final owner decides to negotiate a luxury property with tokens;
- An asset and project tokenization company like BLOCKBR carries out a technical feasibility study, analyzing the legal and fiscal regularity of the asset and the legal requirements for market regulation – and studying the cost and return relationship;
- After contracting the tokenization, the tokenizer will issue the tokens in the defined quantity and the smart contract, the digital document electronically manages all the steps of the tokenization of a property, from negotiations to payments of expected remunerations;
- The tokens are distributed on the sales platform for the public to make their purchases;
- At the end of the offer period, the asset holder receives the capital generated in the tokenization and investors receive the tokens that give the right to the form of income that was agreed upon.
HOW TO TAKE ADVANTAGE OF THE MOMENT WITH REAL ESTATE TOKENIZATION
Tokenize is the future of the way of doing business that is already part of the present, positively affecting liquidity and profitability in several sectors. See how the luxury real estate market can get the best out of tokens.
MORE AGILE NEGOTIATIONS
Agility is a huge benefit of tokenization, especially for illiquid assets like real estate – the ability to turn an asset into cash. This is due to a few factors.
- Blockchain technology with very high speed processing;
- The possibility of fractioning the asset into hundreds or thousands of tokens, similar to shares, which allows more people to leave savings or the traditional investment market to invest in luxury real estate;
- The uninterrupted availability of the digital platform where tokens are traded.
In this way, this asset becomes even more attractive as a way to invest and obtain income from renting a high-end property or from a future sale, accounting for profit.
SAFER AND TRANSPARENT TRANSACTIONS
Whether in a luxury property sale or capitalization of it to remunerate through rents, the blockchain uses the highest security standard to protect sensitive data from investors and negotiations.
Each transaction generates a block of data with a unique record that, in turn, is inserted into a blockchain, an architecture that combined with the consensus protocol and digital ledger, makes luxury real estate offerings tokenized safer and more transparent.
And everything is done 100% electronically, without human interference.
SIMPLICITY TO INVEST
Buying token for a luxury property is a simple and quick operation; it is enough to have an account in an asset tokenizer and a digital wallet to store the acquired tokens.
BLOCKBR offers a simple and intuitive digital platform for investors to find everything about tokenization and make their choices with peace of mind among the many options.
BLOCKBR Digital Assets is a fintech specialized in tokenization of assets and investments that delivers infrastructure to the regulated and non-regulated market through an All-In-One platform that offers the transformation and interoperability between assets and investors.
For more information, visit: http://www.blockbr.com.br or @blockbr_ on social networks
