The real estate sector has been traditionally characterised by significant capital outlays and lengthy processes and barriers to access, but this is changing, thanks to revolutionary financial innovation. New technologies and platforms are improving access to property investment, streamlining transactions, and creating more flexible ownership structures, exciting times indeed. SWIFT Group takes a glance at these global trends that are reshaping the investment landscape and helps both investors and developers unlock new avenues for financial growth.

Real estate tokenisation for fractional ownership

One of the most groundbreaking financial innovations in real estate is tokenisation, which is expected to make a big impact in the next decade. This process involves converting ownership rights in a property into digital tokens on a blockchain. Each token represents a fraction of the asset, allowing multiple investors to own a share of a property with significantly lower capital requirements compared to traditional direct ownership. This type of ownership increases accessibility in the real estate market, making it inviting to even smaller players who might have previously been left out of the market. Whatever your end goal, there is immense potential for tokenisation to unlock investment opportunities in high-value properties and diversify portfolios.

Crowdfunding platforms for property investments

Previously a popular choice for startups, crowdfunding platforms have emerged as a powerful tool for real estate investment. These online avenues connect developers seeking capital with a pool of individual investors who can contribute smaller amounts, bypassing traditional financial institutions and allowing for more direct participation in real estate projects. Crowdfunding offers the opportunity to diversify portfolios beyond immediate geographic locations and provides developers, particularly smaller and medium-sized enterprises, with an alternative source of funding to fuel local development initiatives. Some of the best real crowdfunding sites to date are Fundrise, Equity Multiple, and YieldStreet.

PropTech startups revolutionising finance models

We’ve seen how FinTech has disrupted the finance sector, and now the wave of PropTech startups is doing something similar for traditional real estate finance models. The market size is expected to reach $133 billion by 2032. Leveraging technology, PropTech startups are able to create innovative solutions for lending, mortgage processing, property valuation, and investment management. From AI-powered platforms that simplify mortgage applications to data analytics tools that provide more accurate property valuations, PropTech is increasing efficiency, reducing costs, and enhancing transparency in financial transactions related to real estate. In short, it’s paving an attractive path for both local and international investors.

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