Is real estate in the METAVERSE a good investment for 2022?

The metaverse concept is still relatively new: its adoption and capitalization have been growing slowly over the last years, but it wasn´t until October 2021 when Mark Zuckerberg announced he would be rebranding Facebook as Meta, that it started its boom.

The metaverse presents itself as a virtual escape, an alternative to the real world without its physical limitations. You can take all the activities in the real world to the metaverse such as social gatherings, concerts, business meetings, real state purchasing; all these activities become easily accessible and the experiences can be taken to another level in a world where everything you can dream of can be built and live.

No wonder that with these endless possibilities, real estate prices in the metaverse have skyrocketed because of the heavy investments made by powerful companies and celebrities that see the metaverse as the future.

For example, in October 2021, Tokens.com, a blockchain technology company, acquired 50% of virtual real estate company Metaverse Group for $1.7 million. In November, the Republic Realm platform purchased a property in The Sandbox for a price of $4.3 million. This property was turned into Fantasy Islands, a complex of 100 Islands, 90 of which were sold on the first day and multiply their price up to 8 times.

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The overall growth over the last year has been amazing:

  • In 2021, metaverse real estate sales on the four major metaverse platforms: Decentraland, the Sandbox, Pixelvox and Somnium Space reached $501 million and are expected to double to $1 billion this year.
  • The average price of a parcel in major metaverse platforms has increased from $1,265 to $12,684.
  • Sandbox LAND grew by 15,000% in 2021. It also had the largest transaction volume in the same year with a total amount of $350 million for 65,000 transactions in virtual land.

Just like properties in the real world, when it comes to choose a land within the metaverse it all comes down to the golden rule: location, location, location: As big brands like Atari, Samsung, Miller Lite, and Adidas have set their place in The Sandbox and Decentraland, many early buyers of lands adjacent or close to them have ripped huge profits from their original investment. Another example is the sale of a property adjacent to Snoop Dogg’s in The Sandbox for $450,000.

The idea of a virtual world sounds like fantasy to many and just like a passing trend to others; many believe it will take a couple decades before we really see massive adoption, nonetheless, the upward trend in real-state price seen in the statistics is undeniable.

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Purchasing a land in a virtual world for $20 would have sounded like a crazy idea to most people in 2017, and that was exactly the price in Decentraland’s first land auction in December that year; the cheapest of those very same lands is $5000 today. With that in mind, investing in real estate within the metaverse doesn’t sound so crazy anymore 2022.

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