บทความ

STO Asset with Fractional Ownership

Condominium Limitations

Thailand real estate investment market is still booming admit a slow down of the market. With the global economy slowing down due to multiple factors, the Thai real estate market might be most suffering from the trade war of the US and China as Chinese foreign investment represent more than 70% of the current property market. Moreover, Thailand still face many obstacles toward housing investment for its own population. According to Swiss credit survey, Thailand have seen its income inequality gap widened taking over Russia and India. As such, Thai people would face the problem of low investment liquidity, and foreigners would face the difficulties in bringing overseas’ money into Thailand for the investment. Distributed technologies such as Blockchain enables us to answer to some of the obstacles such as low investment capacity and cross country real estate purchase.

Smart Contracts Solution

The returns from condominium would be automatically distributed to investors through Smart Contract. Luckily for distributed ledger technologies, besides its immutable security if well built, allows to reduce the number of middlemen involved during the process of fractional ownership. This is also true for real estate. In the current real estate investment opportunities, investors and development companies pay real estate agents as much as 3 % of the price tag and the process can take up to a week to complete a transaction. But with smart contracts ready to be tailored for the customers by the project developer, the cost and transactions fees could be reduced to nearly 0% and it would only take a couple of days if not in 2 days for the transaction to take place. Moreover, if we add the possibility of fractional ownership during the purchasing stage which includes tailored incentives, the market would see a huge jump of demand as the initial investment deposit could be set as low as the project sees it fit.

Redeem System

Moreover, the “Redeem” function will be available for all investors to trade tokens for the rights to own any condominium’s rooms, where the value must be equal on both sides. Thus, fractional ownership removes the entry barrier for investors with limited purchasing power. Allowing a segment of the population that couldn’t dream off once owning real estate that was too far out of reach for them. Might this be a possible answer for low Thai income owners? Moreover, they too would reap financial benefits that wouldn’t be possible without the automated process of smarts contracts.

บทสรุป (ความคิดเห็นส่วนตัว)

When we think about the segment of the population that we aim to help, we have to see it as the global population as well. Any investors around the world could take part in the fractional ownership of an asset through a simple KYC process. Might this be a possible answer for facilitating foreign investors? And last but not least, the reduction cost in time and money towards middlemen would benefit us all.

In the near future, once laws and regulations are supportive, investors from all parts of the world will be able to trade STOs. Trading tokenised condominium deed, through digital asset exchanges at appropriate token values, by smart contracts.

*Bitkub Blockchain Technology is a consulting specialist that is committed to assisting you in every business opportunity, which comes with laws that will be drafted in the near future.

*Remark: There is no law concerning the creation STO and offering of such asset in Thailand.