Why Are People Buying Digital Property When It Doesn’t Exist In The Real World?
While the overall crypto market is on a downward trajectory this year, there is a part of it that is continuing its bull run. Investors have maintained their faith in the virtual real estate sector, buying and selling properties in the so-called Metaverse. People are paying huge money to buy a property that they can’t actually touch, feel or visit. Yet, there has been a growing interest in owning something that isn’t real. Buying even a small plot, say of 1,000 square feet, can go for as much as $2,00,000 (roughly Rs. 1.52 crores) in the virtual world.
The digital real estate craze has gained so much momentum that even mainstream investors and real estate companies are now getting into the business. Experts say the interest in purchasing the Metaverse land is increasing because it carries the concept of intrinsic value from the real world.
Real people interact with each other in these virtual worlds as cartoon-like characters called avatars. The Metaverse also allows them to buy a property next to those they like, for instance, celebrities, and “live” there.
The top real-estate players in the segment include Sandbox, Decentraland, Cryptovoxels, and Somnium. Real estate sales on the platforms had reached $501 million in 2021 and analysts believe it is likely to cross $1 billion this year. Rap legend Snoop Dogg has already announced a partnership with Sandbox. The partnership will allow the rapper to invite fans into his virtual mansion for either to take part in a pool party, view his collection of NFT art and cars, as well as play with his dogs.
The location appears to be the key that is driving this real estate world. When entering the Metaverse, people tend to visit areas that have a large crowd. Thus, these areas command a higher price. A person recently paid as high as $4,50,000 (roughly Rs. 3.43 crores) to be Soon Dogg’s neighbour in the virtual world. There is no way that person can find a place next to the rapper’s home in the real world for that money. So, the promise of an exclusive experience is another factor that’s driving this craze.