Cover Land sale in the Sandbox metaverse

Plots of pixels are the latest hot commodity and investment trend for property buyers on Web3

A sudden land rush is driving up property prices—but not where you’d expect it to be. The investment trend sees people snapping up parcels of virtual land in the metaverse for millions of dollars, with estimated sales reaching US$5.37 billion by 2026.

So while Hong Kong boasts the most expensive retail high street in the real world, the virtual Fashion Street district on the Decentraland platform is setting records: Tokens.com, owner of virtual retail estate Metaverse Group, paid 618,000 $MANA (US$2.43 million) for 116 land parcels, equivalent to 6,090 square feet in the digital world. These prices are only continuing to skyrocket, topping the value of an average home in Manhattan.

Clearly, metaverse real estate is the future, so here's what you need to know to need to know about buying land in the digital utopia.

Extended Reality

If some people remain dubious about buying NFTs (non-fungible tokens), land in the metaverse can bring a lot more utility than a jpeg. For one, when we run out of space to build in the real world, it’s only natural to look to the infinite space in the digital realm. When entering different virtual worlds, you can socialise with other avatars, interact with objects, visit an art gallery or even experience a music festival—allowing your digital twin to experience events in the metaverse just as you would in real life, but without borders or travel restrictions.

Currently, Sandbox, Decentraland, Cryptovoxels, and Somnium dominate the metaverse space of real estate. The difference between building a Sims house versus in the metaverse is that you have true ownership of the land, recorded on the blockchain. Virtual property may also be mapped out to real addresses in San Francisco or New York through Upland’s metaverse platform. Owning land in the metaverse gives you the ability to create your own experiences, decorate a home with designer furniture NFTs, or monetise your digital property for profit.

Tatler has recently acquired land plots in Sandbox within Mega City 2, a district primed for the most influential community members. There, Tatler will be hosting a series of events virtually, including its annual Tatler Ball. Millennium Hotels and Resorts, a hospitality brand under Singapore billionaire Kwek Leng Beng, will also debut its first virtual M Social hotel as a way to present immersive experiences whilst integrating real-life engagement.

Although an infinite amount of land is available, location, size, and land scarcity remain to be important factors in virtual real estate. Certain hub districts are more popular—those with more user traffic especially, as they are ideal for developers to flip as advertising space.

Metaverse real estate firm Republic Realm already holds 2,500 virtual land plots across 19 virtual worlds, and is looking to develop parcels to maximise returns. Prices of land have risen as much as 500 per cent, with demand booming ever since Facebook pivoted to Meta and its new Web3 strategy. Valuations continue to soar as more users are actively joining new worlds, and brands begin to explore this avenue as a new marketing channel.

Investing in Digital Estate

Parcels of lands exist as an NFT and can be easily purchased off the marketplace of any selected metaverse world. Upon purchase, you own full rights of the land and can build virtual property, resell, or even rent, as you do in real life.

Adrien Cheng, CEO of property developer New World Development (and an Asia's Most Influential honouree from Hong Kong), has also recently invested in Sandbox for an undisclosed sum, whilst also acquiring one of the largest plots in the game. Cheng plans to form his own mega city and develop an innovation hub, welcoming startups of the Greater Bay Area including diagnostic and genetic test developer Prenetics, logistics unicorn Lalamove and tech accessories brand Casetify.

To purchase larger plots of land or from a secondary market, you can also liaise with a metaverse real estate broker (Selling Sunset spin-off anyone?). Although transactions occur on the blockchain and eliminate the need for a middleman, a virtual real estate broker can help source and facilitate the trade between peers-to-peers securely. As the average price for a parcel of land doubled to US$12,000 across the ‘Big Four’ worlds, few virtual real estate agencies also offer mortgage plans to make buying more affordable for regular buyers.

The Future of Virtual Land

Where housing is scarce and property difficult to afford in many cities, youngsters are now able to join the property ladder in the metaverse. With many use cases and lucrative potential for businesses,  virtual estates can be good investments for first-time buyers in the metaverse. However, just like every investment, risks are involved evident by the millions lost in purchasing virtual land deeds for Yuga Labs’ forthcoming metaverse world, Otherside.

The value of digital technology is proving to be just as important as the real world, as society begins to migrate toward the virtual world. The new generation cohort is recognised for building wealth from digital assets and is becoming early investors in a promising and high-growth sector. With Gen Alpha born into Roblox and armed with all their Minecraft house-building experience, they just might become the next property moguls of our utopian future.

 

 

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