It may be difficult to buy a home or a plot of land in Toronto, so why not try the metaverse? Ever since Facebook announced it would change its name to Meta and focus on building its own digital world, interest in metaverse real estate has skyrocketed. In fact, real estate sales in the metaverse surpassed $500 million in 2021 and could double in 2022, according to data from MetaMetrics Solutions. Are we ready for this?
It’s becoming increasingly clear that commercial real estate in the metaverse is going to play a huge part in the global real estate industry in the years to come. In fall 2021, Tokens.com inked a letter of intent to buy a 50% stake in a digital real estate portfolio owned by Metaverse Group, which then plans to market the offerings as the first REIT (real estate investment trust) for digital real estate. The Metaverse Group believes that a public listing could come in 2022 or 2023.
The popularity of buying and selling digital property means companies like the Metaverse Group work for the most part, on the same type of tasks related to buying, selling and marketing as a traditional real estate company. As prices rise and buyers seem frenzied over virtual land — some express skepticism that investing in digital real estate will prove to be prudent down the road.
Yet despite the high prices, interest in metaverse real estate continues to grow, especially as the pandemic has driven more people online and made them more apt to virtually socialize. You can go into the metaverse and go to a museum. You could meet other friends there regardless of where they’re geographically located. Those interested in metaverse real estate also have competition, namely celebrities who have not been shy about touting their digital real estate activity.
The attention and interest given to the Metaverse have not escaped other companies besides Meta, formerly Facebook, and Microsoft, who are also eager to jump in on the action.
Like traditional real estate which often maintains value even during tough economic times, metaverse properties continue to boom despite ebbs and flows with Bitcoin (BTC) and other cryptocurrencies.
Investment firms are even dipping their toes into the Metaverse and continue to learn more about how they can get involved. High prices, popularity and the ease of buying and selling virtual land (in contrast to traditional real estate) mean the Metaverse will be more than a buzzword. Like the domain name scramble during the early ages of the internet, savvy investors and buyers who snap up properties in prime locations will look very smart as more and more people jump into the metaverse.
Keep in mind when assessing the metaverse as an investment opportunity, you can equate it to cryptocurrencies; getting in early can make you rich – but could also get you burned.
As the Metaverse continues to grow and expand — so will digital real estate. You can’t apply the rules of the real world into the metaverse. Savvy buyers and investors would be smart to stay ahead of the curve and assume the metaverse real estate boom is here to stay.