Investment banking giant Citigroup has released its research findings. How real estate technology can affect the housing market It addresses virtual real estate in the metaverse and crypto-backed mortgages.
In a report released Wednesday titled “Home of the Future: PropTech — Towards a Frictionless Housing Market?” Citi said Crypto, blockchain, and assets in the metaverse have “potential to transform the traditional real estate market,” while crypto-backed mortgages could improve the home buying process. But many individuals have seen investment in metaverse assets grow in the past two years.
Citi reports that real estate loans linked to crypto assets can help investors “Take advantage of the investment received” without the capital gains tax. But it also commented on the risks in the volatile market. While many standard loans linked to fiat money have regulatory procedures to assess borrowers’ ability to repay, crypto holders may be forced to pay significantly more ifThe price of tokens has dropped.during the bear market
“If the value of crypto goes down, borrowers may face margin calls and eventually cryptocurrencies may be forced to sell. If the collateral value falls below a certain threshold, for example 35% of the asset value,” the report said, “so the adoption of cryptocurrencies in the credit profile may increase the overall risk of the loan.”
In addition to real estate purchases, the Citi report reviews the potential benefits of owning and generating income. “Digital real estate” in the metaverse, especially The researchers detail that Virtual property owner in The Sandbox ( SAND ), how has LAND treated the metaverse as an investment similar to real-world real estate? The price has increased from about $100 per LAND in January 2021 to as high as $200,000 the following year:
“Given the nascent nature of virtual real estate environments, many LAND buyers lack concrete plans. And it only speculates about the future growth of the platform and drives up land prices.”
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