Dubai is taking a big step to make real estate investment more accessible for everyone. The city plans to introduce tokenization, a process that turns real estate assets into digital tokens on a blockchain.
This change could allow more people, including small investors, to own a piece of Dubai’s booming real estate market.
What is Tokenization and Fractional Ownership?
Tokenization is like breaking a property into small pieces that you can buy as digital tokens. Instead of buying an entire apartment or villa, you can own a fraction of it. This is called fractional ownership. For example, with as little as AED 500, you could own a small share of a property in Dubai.
This idea lowers the cost of entering the market, making it easier for individuals and companies to invest. “We soon want to have everyone with AED 500 [to be able to] access and buy a token of the Dubai real estate market and benefit from its economic value,” said Mahmoud Al Burai, a senior adviser at the Dubai Land Department.
Simplifying the Process
Right now, fractional ownership involves complicated rules and approvals. Companies must deal with multiple regulators, set up special legal structures, and pay various fees. These hurdles have slowed down the growth of this concept.
Dubai plans to fix this by streamlining the process. A new tokenization project, currently being tested, will simplify regulations and include important security measures like “know-your-customer” protocols and anti-money laundering checks. The changes aim to reduce costs for platforms and protect investors.
“This will democratize real estate investment [and] allow small investors to invest in Dubai,” Al Burai explained.
A Growing Market
Dubai’s real estate market is already massive, with transactions worth AED 634 billion ($172 billion) last year. The city aims to grow this to AED 1 trillion annually. To achieve this, Dubai needs new ideas like co-living, co-working spaces, and affordable housing.
The tokenization platform could attract various businesses, such as tech companies, investment platforms, and property developers. Even companies that use traditional crowdfunding might benefit from the lower costs and easier processes under this system.
A New Way to Invest
This innovative approach could open the door for small investors to take part in Dubai’s economic success. By making real estate more affordable and accessible, Dubai hopes to attract more people and businesses to its thriving property market.
As Al Burai puts it, “We look at the technology as a way of producing a new investment product.”
If you want to participate in this and many more interesting projects in Dubai, contact Glidai Properties today. We can help you find the right property at the right price.