By the end of 2021, metaverse real estate sales reached a value of $500 million. According to investors, and analytic experts, this is only the beginning of what’s to come, and stand convinced that metaverse sales forecast a profitable climate, causing future sales to double up by the end of 2022.
- Metaverse Real Estate sold $500 million worth of property in 2021. Experts foresee these numbers will double by the end of 2022.
- Janine Yorio, a metaverse real estate investor and advisory company Republic Realm CEO, explained how the metaverse rewards may top the risks.
- Metaverse real estate sales are focused on Sandbox, Decetraland, Cryptovoxels, and Somnium.
MetaMetrics Solutions explained that the real estate sales of the four major metaverse platforms escalated to $501 million in 2021. The January sales, in comparison, only estimate $85 million. One metaverse data provider informs that if the metaverse sales continue at this pace, they will reach $1 billion in 2022.
This rising meta-interest began with Zuckerberg’s announcement on October 28th, when it was announced he’d be directing Facebook to the metaverse. Following Mark Zuckerberg’s presentation, in November, the metaverse real estate escalated approximately ninefold or $133 million. The interest is not as huge as it was in November, but January sales in 2022 are, indeed, 10 times bigger than last year.
According to BrandEssence Industry Research, from 2022 to 2028, the metaverse real estate market is predicted to increase at a compound annual rate of 31% each year.
Janine Yorio, CEO of Republic Realm, a metaverse real estate investment and consultancy organization, noted that while there were risks to metaverse real estate investments, the returns will be much bigger and therefore, more appealing.
The Big Four
The Big Four metaverse platforms that govern the space are Sandbox, Decentraland, Cryptovoxels, and Somnium.
Republic Realm bought $4.3 million worth of metaverse land already and Sandbox plans to develop a complex of 100 islands called Fantasy Islands. 90 islands were bought for $15.000 each, and today, Republic Realm resells them for over $100,000. The complex will have Republic Realm villas and a boat-and-jet-skis market.
Investors find it difficult to evaluate metaverse assets as their scarcity is artificial and the future is uncertain. But, platforms eagerly sell real estate in metaverse day-by-day.
The sales happen on the Big Four platforms with 268,645 parcels of different sizes.
Sandbox dominates the market. What’s more, one of its 166,464 parcels – 96×96 meters or 106×106 yards – was sold for $12,700 in December 2021.
Decentraland holds 90,600 parcels, 16×16 meters big, and sold for $14,440 each.
Location May Still Matter
Companies and investors are joining the metaverse real estate mania – and the fight is now to get a better location in the next Manhattan or Monaco.
However, Yorio says the metaverse real estate popularity is different from the one in real life. The value of the location will be determined based on the purpose of the business.
Then again, other investors argue otherwise. They claim the parcels near Snoop Dogg or the Atari development will have a different impact than having a random business neighbor.
The CEO of Tokens.com, Andrew Kiguel, raised $16 million to invest in the metaverse real estate. The company bought $2.4 million worth of land in Decentraland’s fashion district as a way to move their business to virtual territories. Also, Kiguel plans to rent his space to two North American apparel companies and stands assured that the future big business is purely commercial. People will be coining it in to advertise products to younger digital audiences.
Kiguel constantly stays in touch with investment banks, accounting firms, mutual funds, and podcasts so as to emerge in the metaverse. Kiguel owns 12 properties on Somnium’s harbor and believes he can rent them well due to their attractive location.
Yet, some say the metaverse may be the greatest scam for investors. People believe that the metaverse property cannot have value as physical ones, because every land can be reproduced by coding.
Some may have forgotten the Second Life virtual land grabs that made the second Promised Land. However, the epilog was really unsuccessful and turned out to be a scam. Edward Castronova calls metaverse El Dorado for internet startups, with the goal to drag many startups to bankruptcy.
Elder investors look below the belt when it comes to the metaverse, but younger buyers and investors are instantly hooked on the virtual appeal.
The problem with the metaverse is that some users have difficulty valuing their digital stuff or the properties they cannot touch, or hold.
The younger generation has no problems buying online land, however. They’re familiar with buying or authorizing sites online, so the metaverse comes as the unofficial 3D internet generation. And, since the future belongs to the youth, metaverse will be the future once it reaches mass adoption.