While the overall crypto market has been on a downward trajectory this year, there is some part of it continuing its bull run. Investors have maintained their faith in the virtual real estate industry, buying and selling real estate in the so-called Metaverse. People pay huge amounts of money to buy a property that they cannot touch, feel or visit. Yet there is a growing interest in owning something that is not real. Buying even a small plot, let’s say 1,000 square feet, can go up to $2,000,000 (about 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 that the interest in buying the Metaverse land is increasing because it carries the concept of intrinsic value from the real world.
Real people communicate with each other in these virtual worlds as cartoon characters called avatars. The Metaverse also allows them to buy a home next to the ones they like, e.g. celebrities, and “live” there.
The main real estate players in the segment are Sandbox, Decentraland, Cryptovoxels and Somnium. Real estate sales on the platforms had reached $501 million by 2021 and analysts believe it will likely exceed $1 billion this year. Rap legend Snoop Dogg has already announced a collaboration with Sandbox. The partnership will allow the rapper to invite fans to his virtual mansion to join a pool party, view his collection of NFT art and cars, and play with his dogs.
The location seems to be the key that drives this real estate world. When entering the Metaverse, people tend to visit areas with a large crowd. These areas therefore demand a higher price. A person recently paid a whopping $4,50,000 (about Rs. 3.43 crores) to be Soon Dogg’s neighbor in the virtual world. It’s impossible for that person to find a place next to the rapper’s house in the real world for that money. So the promise of an exclusive experience is another factor driving this craze.