As the metaverse evolves into a more tactile and vivid reality, an increasing number of individuals will be interested in being a part of the social ecology it contains. In particular, this trend is expected to affect the real estate investment market in the metaverse.
A new study forecasts that the value of this metaverse land market will continue to increase at an exponential rate, according to research on the worldwide market conducted by Technavio published in a press release on July 22.
Indeed, the market research firm identified that the value of the virtual real estate in the metaverse is expected to increase by $5.37 billion by the year 2026.
This growth is expected to be driven by two different factors. First, the metaverse will progressively shift toward a more mixed reality experience. This will provide additional value to the platforms that visitors may inhabit, where they can make annotations and decode tags for a variety of application-specific objectives.
Secondly, it has to do with the growing popularity of cryptocurrencies, which will make this form of property more accessible and straightforward to acquire in order to sell or rent, providing its owners with the opportunity to receive an income from renting or selling the property.
Metaverse is not without its challenges
Despite its many positive aspects, the market for virtual real estate is not without its challenges. Due to the fact that it is so dissimilar to the real estate market in the actual world, it is still a nascent industry that is still trying to find its position.
Each virtual land will have its own pricing, which will be determined by a variety of criteria that vary from one to the other. According to the study:
“Virtual land price does not follow the pricing pattern of the physical world. Therefore, the value of digital assets, including metaverse real estate, would basically depend on how the buyers perceive their price, thereby leading to fluctuations.”
These swings have the potential to have a detrimental effect on the investments of organizations and people that are interested in entering into these new financial instruments.
The majority of this proliferation will come from investors and businesses in North America, with the area accounting for 41% of the investments made over the stated time. This is also a direct outcome of the widespread acceptance of apps that use metaverse technology.
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