Property players of all sizes have horror stories about protracted title battles and hidden liens, now blockchain technology could be the solution to their problems. A blockchain is a form of digital ledger in which information – such as a transaction, who is participating in the transaction and a code to make each block unique – is stored in a distributed network – ie across a number of computers.

“Blockchain can be the building block for land title and the technology allows liens, rights of way and other information to be attached to the chain, in order to provide secure title,” says Chris Marriott, South East Asia chief executive at Savills. “The cost and time savings would be substantial.”

The distributed nature of blockchain provides important security; thousands or indeed millions of copies can’t be lost or destroyed unlike paper records or those on a single hard drive. Title changes will be added to the block over time, providing a full, transparent and immutable record of the asset’s life.

More than 25% of title reports detail some type of defect to the title, according to the American Land Title Association and while data is not available for Asia Pacific, it is reasonable to assume the percentage will be higher.

India has expressed interest in establishing blockchain registries, but it seems that Sweden is the nation closest to utilising the technology; its Lantmäteriet, which is already paperless, is working with private sector partners to create a structure for conducting real estate deals on the blockchain.

The advantages are not limited to developing nations without a solid land registry; the processing capability of blockchain is in real time, very secure, and increasingly low-cost. Widespread application of the technology to real estate transactions could substantially increase, not just speed of transfer, but also liquidity, which could broaden ownership, which in turn would add value to property when compared with other asset classes.

As with many other new technologies, blockchain comes with the spectre of disintermediation, for title insurers, lawyers and possibly brokers. Last year, the Royal Institute of Chartered Surveyors released a report, The Impact of Emerging Technologies on the Surveying Profession, which suggested real-estate professionals “are likely to become either data scientists or client managers” in the future.

“Real estate is undergoing the digitisation of everything we’re doing,” says Marriott. “Ultimately it will allow us to serve customers better and more efficiently, which is only positive.”

Further reading:
Blockchain and how it’s changing the nature of real estate
Don’t let Bitcoin blind you to the usefulness of blockchain

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Chris Marriott