The Future of Property Ownership: Why Metaverse Real Estate Matters

• The metaverse real estate arena is largely booming, with virtual land sales surpassing the sum of $500 million in 2021, further expected to witness growth with a 31.2% CAGR towards $5.37 billion in 2026.
• People invest in, rent, and buy digital land, yet risks include market volatility, regulatory uncertainties, and reliance on mainstream adoption.

Picture a section of ground not necessarily made up of bricks and mortar but virtually in a world where individuals interact, work, and shop. Sound futuristic? Well, it’s real now. The metaverse real estate market is sky-high, with prognosticators claiming that it will grow at an astonishing CAGR of 31.2% to reach $5.37 billion by 2026 (GlobalData). Companies such as Meta, Microsoft, and luxury fashion brands have begun to stake their claims to digital land. But are we merely viewing it as a trend, or is it possibly what the future holds for real estate?

What Exactly is Metaverse Real Estate?

Metaverse real estate is very much the same as conventional real estate in that you can buy, sell, lease, or develop the land, but this is all entirely digital. The ownership is maintained through NFTs, meaning that each virtual piece of land is unique to an owner.

It may sound somewhat out-of-this-world, yet investors are getting serious. In 2021, virtual land sales exceeded $500 million (MetaMetric Solutions). This goes to show that digital property is not just a passing trend, as some of the most expensive pieces of land are sold for millions.

“Virtual real estate operates just like the real world—location and demand drive value,” explains Andrew Dunn, VP of Marketing at Zentro Internet.

What Happens When You Purchase a Virtual Land?

After purchasing land in the metaverse, one gets an NFT demonstrating ownership over that virtual piece. The owner can do anything with it, like building digital shopfronts or leasing a property for virtual experiences or brand activations. If luck is in your favour, you may be able to sell your property for a profit just like in real property.

And those returns may get wild. One investor bought a virtual piece of real estate for $4,300 and flipped it for $45,000 six months later (CNBC).

Metaverse Land: Buying Trends

Digital real estate is dominated by a small cast of metaverse platforms. Decentraland is perhaps the most prominent, with a single plot once going for $2.4 million. Another heavyweight that has attracted many high-profile investors, including Snoop Dogg, who has created his digital neighbourhood called “Snoopverse,” is the Sandbox. Somnium Space focuses on VR-based experiences and immersive real estate transactions.

Calling land in these platforms an investment in prime real estate before it becomes fashionable provides an apt analogy.

“Companies are setting up virtual offices to improve remote work experiences,” says Paul Sher, CEO of FuseBase. “It’s a game-changer for business interactions.”

Is Virtual Real Estate a Good Investment?

This space has huge potential. The metaverse market is predicted to checkered sky by $1.5 trillion by 2030 (PwC), and real estate transactions alone hit $1.9 billion last year in 2022 (DappRadar).

Natural scarcity in metaverse lands is one of the reasons these lands demand exorbitant prices. While the internet lends itself to free usage in creating limitless digital spaces, metaverse platforms exist in the limitation of parcels of land, just as we’d appreciate such a limitation in the context of the real world. The Sandbox, for instance, has a total of only 166,464 plots. Hence, prime locations are coveted.

Virtual property owners have been able to mint some real money, with some lucky investors earning more than $15,000 every month simply by renting their virtual spaces to brands or hosting exclusive events (Fortunes).

The Risk

Not every investment in the metaverse will be a golden one. The markets are still fraught with volatility, with severe fluctuations in price. Since regulations seem to be yet to catch up to digital property, there is also uncertainty due to the lack of any bonds. The entire concept rests on technology, and if metaverse platforms fail to become mainstream, the value of virtual real estate may be set to decline.

“The metaverse is making real estate investing accessible worldwide,” says Bennett Heyn, Founder of Sell House Columbus Ohio. “But like any investment, you need to think long-term.”

Ways to Start an Entry in Metaverse Real Estate

If you are interested, the first step is to select a platform such as Decentraland or The Sandbox. Transactions occur through NFTs; therefore, it is important to know how the ownership of blockchain works. Many experts recommend starting small: buy a small piece of land, watch the market trends, and interact with metaverse communities to learn how it is done.

Is This the Place Where Real Estate Would Head in the Future?

This fast-emerging metaverse could as well easily position itself to become the next trillion-dollar asset class for digital property. Companies, investors, and even ordinary people are creating this economy in real-time, for better or worse.

However, the actual question is: Will you be prepared when you want to make your claim in this virtual world, or will you sit on the sidelines and watch the digital land rush go by?