Metaverse Real Estate & Other GLOBAL DIGITAL TRENDS

Though the metaverse is still largely in its infancy, many are betting big that it will explode in decades to come. (Facebook’s parent company even staked its name on it).

For proof, just look at the sheer amount of metaverse real estate purchased last year. As of November, nearly $2 billion in metaverse land had been snapped up over the past 12 months. In 2021, $501 million was spent there. 19

Those are big numbers for what essentially amounts to a few lines of computer code –but clearly, investors have their sights set on long-term returns. In fact, a parcel of land in Decentraland 20 – one of the top metaverse platforms – was just $20 in 2017, when the first auction was held. Now, parcels are going for around $4,000 apiece. In the long term, one tech executive thinks it will be “a multitrillion-dollar opportunity.”

How It Works

Buying metaverse real estate works much like purchasing an NFT. Using cryptocurrency, you purchase a plot of land or property online, and once finalized, receive a piece of blockchain code as your deed.

There are several “worlds” to purchase metaverse real estate in, with Decentraland and The Sandbox being two of the most popular options.

After you’ve bought land in the metaverse, you can build on it, lease it out, and even host events in the virtual world. Shoe company Adidas, for example, hosted the GamesBeat Summit on its plot of land in The Sandbox last year.

WHO’S INVESTING IN THE METAVERSE

Metaverse real estate has wide appeal. Individual investors, celebrities, and even major corporations are getting in on the game, banking on big growth over the next decade.

In January 2022, Microsoft spent nearly $69 billion to acquire Activision Blizzard, which will allow it to develop games and software within the metaverse. 21 Major companies like PricewaterhouseCoopers, JPMorgan Chase, and Samsung have also invested in the world. The latter has even created a “digital experience” in the metaverse called Samsung 873X, which is meant to mirror the brand’s flagship location in New York City. 22

The approach is one brokers have latched onto as well. A $9 million Beverly Hills listing actually came with a metaverse mirror property, which buyers could add on for $100,000. They could even virtually “visit” the metaverse house – located in Decentraland – to view it and walk around in it.

While the practice hasn’t picked up widespread steam yet, it has been used by a handful of luxury agents, and buyers – not to mention media publications – seem intrigued by the premise.

Considerations And Potential Growth

Metaverse real estate prices, like crypto, have faltered in recent months. 23 And there’s always the question of scarcity – or the lack thereof in the digital world – and how that could impact price trends.

Though metaverse platforms currently have a set number of virtual plots, it’s possible developers could add more down the line, which might drive down values. It may be necessary for regulatory authorities to consider creating policies to help protect the longevity of values. If that happens, investors may look forward to solid returns in the future.

According to a forecast from Vantage Market Research, metaverse real estate is projected to bring in $5.95 billion in revenue by 2028. 24 That’s up from just $821 million in 2021 – a 624% increase in just seven years.

THE REPORT 2023 reveals that wealthy individuals around the world are in the process of adapting to a market that’s finding a new equilibrium with new reference points. Interest rates are higher. Home selection is improving. List prices are down from late 2021 and early 2022. However, many markets are still posting median sold prices in certain price ranges near 2021’s all-time highs. High-demand property types are still selling at or near asking price.

What has shifted significantly from the pandemic boom days are the number of luxury properties selling. All indications are that 2023 will be a slower year for sales compared to 2021 and 2022. Until economic certainty returns, it is likely that some affluent buyers and sellers will take advantage of this calmer market to be more discerning about their future real estate goals.

Buyers who are waiting for prices to dramatically fall will adjust to this new reality. Sellers, too, will need to realize that bidding wars and multiple offers over list price are fixtures of a market past.

HNW individuals, who want to move for personal lifestyle reasons and aren’t locked in to extremely low interest rates, will continue to make moves if they find the right opportunity. They’ll continue to prioritize their happiness and enjoyment, looking for highly amenitized properties and secondary homes that offer them a range of experiences. Don’t be surprised by the growing number of wealthy individuals seeking homes in foreign countries.

From the perspective of most luxury insiders, real estate experts, and Luxury Property Specialists we consulted for The Report, the key to navigating the current luxury housing market is to look