From real estate financialization to decentralization: A comparative review of REITs and blockchain-based tokenization

IF 3.4 2区社会学 Q1 GEOGRAPHY

Geoforum Pub Date : 2025-02-01 DOI:10.1016/j.geoforum.2024.104193

Ang Liu , Cheng Chen

{"title":"From real estate financialization to decentralization: A comparative review of REITs and blockchain-based tokenization","authors":"Ang Liu , Cheng Chen","doi":"10.1016/j.geoforum.2024.104193","DOIUrl":null,"url":null,"abstract":"<div><div>Blockchain-based tokenization represents a transformative force in the real estate sector, offering a compelling alternative to the well-established model of Real Estate Investment Trusts (REITs). As the real estate industry evolves from financialization to decentralization, driven by technological advancements, these two models offer distinct approaches to democratizing real estate investment. REITs have long been a cornerstone of real estate financialization, allowing individual investors to participate in large-scale real estate ventures through fractional ownership of diversified property portfolios, thus advancing financial supply and share of the housing market. However, the advent of blockchain technology and decentralized finance (DeFi) introduces a new paradigm where real estate ownership can be fractionalized into digital tokens, enhancing liquidity, transparency, and accessibility through global 24/7 trading platforms. The findings suggest that while REITs have successfully broadened the investor base and improved market liquidity, blockchain-based tokenization has the potential to advance these achievements further by lowering entry barriers, reducing transaction costs, and decentralizing market operations. However, the adoption of blockchain technology in real estate also presents challenges, including regulatory uncertainties, technological risks, and the need for robust governance frameworks. As the lines between finance and technology continue to blur, this research underscores the necessity of adapting regulatory frameworks and investment strategies to navigate the evolving landscape of real estate investment. The critical review concludes by discussing the future implications of these trends, highlighting the need for continued research and regulatory innovation to fully realize the potential of decentralized real estate markets, particularly in examining housing inequality and affordability, as housing is not only an important investment vehicle but also as a fundamental shelter for people to live.</div></div>","PeriodicalId":12497,"journal":{"name":"Geoforum","volume":"159 ","pages":"Article 104193"},"PeriodicalIF":3.4000,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Geoforum","FirstCategoryId":"90","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0016718524002549","RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"GEOGRAPHY","Score":null,"Total":0}

引用次数: 0

Abstract

Blockchain-based tokenization represents a transformative force in the real estate sector, offering a compelling alternative to the well-established model of Real Estate Investment Trusts (REITs). As the real estate industry evolves from financialization to decentralization, driven by technological advancements, these two models offer distinct approaches to democratizing real estate investment. REITs have long been a cornerstone of real estate financialization, allowing individual investors to participate in large-scale real estate ventures through fractional ownership of diversified property portfolios, thus advancing financial supply and share of the housing market. However, the advent of blockchain technology and decentralized finance (DeFi) introduces a new paradigm where real estate ownership can be fractionalized into digital tokens, enhancing liquidity, transparency, and accessibility through global 24/7 trading platforms. The findings suggest that while REITs have successfully broadened the investor base and improved market liquidity, blockchain-based tokenization has the potential to advance these achievements further by lowering entry barriers, reducing transaction costs, and decentralizing market operations. However, the adoption of blockchain technology in real estate also presents challenges, including regulatory uncertainties, technological risks, and the need for robust governance frameworks. As the lines between finance and technology continue to blur, this research underscores the necessity of adapting regulatory frameworks and investment strategies to navigate the evolving landscape of real estate investment. The critical review concludes by discussing the future implications of these trends, highlighting the need for continued research and regulatory innovation to fully realize the potential of decentralized real estate markets, particularly in examining housing inequality and affordability, as housing is not only an important investment vehicle but also as a fundamental shelter for people to live.

查看原文本刊更多论文

求助全文

约1分钟内获得全文求助全文

来源期刊

Geoforum GEOGRAPHY-

CiteScore

7.30

自引率

5.70%

发文量

201

期刊介绍： Geoforum is an international, inter-disciplinary journal, global in outlook, and integrative in approach. The broad focus of Geoforum is the organisation of economic, political, social and environmental systems through space and over time. Areas of study range from the analysis of the global political economy and environment, through national systems of regulation and governance, to urban and regional development, local economic and urban planning and resources management. The journal also includes a Critical Review section which features critical assessments of research in all the above areas.