Application of blockchain technology in real estate transactions : revolution and resistance

Abstract

Adopting Blockchain Technology (BT) to enhance effectiveness and efficiency in different industries is an emerging field of study. Given the complexity and costliness of the property transaction process, as well as the unaffordable property prices in Hong Kong, there is a pressing need for innovative solutions to simplify the processes and enhance the accessibility to real estate investment. This research examines the potential application of BT in the Hong Kong real estate market and evaluates its capacity to revolutionize the sector, as well as the potential obstacles it might face. This research employed a multi-faceted research methodology, by commencing with a comprehensive literature review on different BT concepts such as tokenization, decentralization, smart contracts, Non-Fungible Tokens (NFTs), fractional ownership, and the current transaction processes in Hong Kong real estate market. Then, combined with the interviews with experts and case studies of the successful adoption of BT in the foreign real estate market to analyse the feasibility and potential impact of adopting BT on Hong Kong real estate transactions. The result of this research reveals that BT could have a significant impact on Hong Kong’s real estate market by enabling fractional ownership, creating an efficient one-stop online transaction platform, and innovating the NFT crowdfunding method. It could offer transformative benefits such as enhanced security, transparency, efficiency, and lower the threshold for real estate investment. However, the traditional transaction methods remain deeply entrenched in Hong Kong real estate market and the technological landscape of BT is still nascent. Implementing BT in Hong Kong real estate transactions would face several challenges including regulatory hurdles, high integration costs, and market resistance. The revolution is undoubtedly challenging and necessitates careful consideration and strategic planning.