BITE-SIZE REAL ESTATE OWNERSHIP MADE EASIER

Abstract

Although blockchain has been around for slightly more than a decade, the technology has only recently emerged as an incredible innovation across every industry. The technology that was previously seen as a supporting tool for BitCoin has turned around and developed various useful decentralized applications. In recent years, there has been many consultative reports and research done by reputable institutions on the wide spectrum of uses for blockchain outside of the financial industry. However, there has been very few research studies done on blockchain technology in the Commercial Real Estate (CRE) industry especially on the discussion of Real Estate Investment Trusts (REITs). This study will be structured to examine the blockchain technology and the capabilities it can provide to the CRE landscape in Singapore. The objective is to provide more insights of how blockchain could be integrated on an investment vehicle to widen their clientele base by meeting the lower commitments from smaller retail investors such as tertiary students, young working adults and housewives. Thus, a blockchain REIT model will be proposed subsequently to show how efficient blockchain is and to also garner more interest on this idea among real estate professionals.

This study will also have a partial analysis of how blockchain could impact the real estate market index using the Generalized Autoregression Conditional Heteroskedasticity (GARCH) model. The analysis of the GARCH model has allowed the research to observe changes to the volume of the real estate market index with the implementation of blockchain. However, these results are still quite preliminary as there are currently no blockchain data publicly available.

Ultimately, this research aims to create more awareness of blockchain’s influence in the real estate lifecycle and to inspire real estate professionals to constantly monitor the growth of blockchain technology as it may one day replace traditional business models.