The metaverse is being gradually built out in order to cater for a future in which the user can enter and purchase all kinds of services. Land parcels and the infrastructure upon them is going to be in high demand. Therefore the investments have already started and a lot more is about to follow.
Exponential growth
A recent study by global market research company Technavio forecasts exponential growth in metaverse real estate and estimates that the value invested into the sector will grow to more than $5 billion by 2026.
The factors for this growth are said by Technavio to be the “growing popularity of mixed reality and cryptocurrency,” in that certain cryptocurrencies make it much more accessible to buy, sell, and rent metaverse real estate.
Challenges
One of the major challenges cited by Technavio is that of prices of real estate in the metaverse. There are currently huge fluctuations in price as purchasers take into account the scarcity and location of the land, plus the perception the purchaser has as to the long or short term resale value.
Given that there is so much uncertainty in the prices of land plots, this is perhaps discouraging for enterprise buyers who are likely to be put-off by wildly fluctuating price swings, and therefore would perhaps not make their investments.
However, certain very large companies are investing in the metaverse in the form of Meta (Facebook), Microsoft, and Nike among others, and with a probable upward trend in Web3 growth, this is likely to spur investment for the sector.
Where will most investment come from geographically?
North America is where technavio expects most of the investment and growth in the metaverse sector to come from. The U.S. and Canada are key markets for real estate, and it is predicted that 41% of all growth will come from these regions over the next 4 years.
Market growth from this region is expected to be much faster than in S America for example, as consumers purchase “technologically advanced applications,” and large brand names provide the impetus of early investment.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.