The Dawn of New Age for Real Estate
In March 1637, some single tulip bulbs were selling for more than ten times the salary of a skilled craft worker. It is considered to be the very first economic bubble. Some market analysts are describing bitcoins in the same light. Nir Kaissar, a Bloomberg Gadfly journalist, notes that bitcoin has all the attributes of a bubble in the making: radically new, shrouded in secrecy, and has no value other than what a buyer is willing to pay for it. But that is not stopping it taking real estate by storm.
Recently a house in Metro Vancouver caused a stir by listing as for sale in bitcoin. The ad appeared on Craigslist Vancouver and Hong Kong real estate pages. The house has an asking price of 2,099 bitcoin or $5 million Canadian dollars. And, that is not the only place bitcoin listings have appeared. When real estate agent Daniel Andrei Garcia tweets about his Lamudi listed 2,000 square meter farm land for sale south of Manila, the Philippines he mentions the price in bitcoin. Elsewhere, for the price of 755 BTC, you can swoop a luxury villa in Thailand or buy some land for under 35 BTC.
However, homeowners need to be cautious. They need to be au fait with the criminal code in the country they live in. Naturally, bitcoins cannot be accepted from a terrorist organization, a sanctioned country, or from anyone associated with the commission of a serious offence. Dr. Paul Philipp Hermann, co-founder of Lamudi—advises that people use only reputable online real estate websites that can offer full transparency when buying or selling property.
Indeed, overseas buyers may be using BTC in an attempt to bypass individual country’s offshore limits. For instance, in China investors cannot leave with more than $50,000 U.S. Although, with one click of a button bitcoin transactions can pass from one country to another. The Financial Times recently reported that roughly 98% of bitcoin transactions originated in China.
Other complications include the volatility of the cryptocurrency. A house priced at one hundred thousand dollar’s worth of bitcoin today might be worth a thousand in the next few months, leaving the seller with a substantial loss.
Also, the very anonymous nature of the currency makes it next to impossible to perform credit checks and to verify a buyer’s reliability. And, there is no insurance if the deal ends badly. Another reason why the black market and scam industry is keen to use bitcoin.
Bitcoin is in its nascent stage as a currency. The road to its complete acceptance in the financial world is long with many a winding turn, but as more sellers opt to accept bitcoin; the momentum could in the future change the way we buy and sell real estate.