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Will ‘Metaverse Mansions’ be the Future of the Real-estate Sector?

As the world is becoming more digital day by day, investors are also banking on virtual real estate to achieve high returns on their investments. Metaverse is a digital space which allows participants represented by 3D digital representations to interact. It is an online equivalent of a person transacting and interacting in the virtual world. Payments in Metaverse are made in cryptocurrencies that operate on the blockchain. Thus, they are highly secured. Metaverse has no defined owner and the network can be expanded internationally. Meta CEO Mark Zuckerberg predicts that the Metaverse will be mainstream in 5-10 years. Facebook will be spending over USD 150 million to train the next generation of creators to build immersive learning content and to increase access to devices.

Metaverse encompasses all emerging technologies like blockchain, Artificial intelligence (AI), 5G, and content creation. The top real estate developers and brokerage firms are betting big on metaverse mentions and are investing hugely in the virtual world.

What are ‘Metaverse Mansions’ and Why they are Important to Investors?

Metaverse mansions are the parcels of land in virtual worlds. They are programmable spaces in virtual reality platforms which allow people to socialize, attend meetings, play games, sell non-fungible tokens (NFT), attend virtual concerts, and perform thousands of other virtual activities. Creators can monetize the content of their property by just charging for access or trading their NFTs.

Metaverse Mansions or properties are equally important for the corporate sector. A large number of Fortune 500 companies are using virtual properties to advertise their products & services. Metaverse Mansions allow real estate investors to earn lucrative returns on their investments by investing the parcels of digitalized land. Metaverse mansions can be leased as well.

 Global Real estate Sales on Metaverse

The 2021 report by MetaMetric Solutions reveals that real estate sales on the four major metaverse platforms reached US $501 million in 2021, and the sales volume is expected to double in 2022.  Another study by Brandessence research projects the metaverse real estate market to grow at a CAGR of 31% from 2022 to 2028.

Where Does Dubai Stand in Metaverse Mansions? 

Dubai is all set to launch the first Metaverse mansions in the MENA region in 2022. Dubai-based real estate brokerage firm, Union Square House (USH) has announced the launch of the first Metaverse mansion this year. Banking its hopes on 80%+ of Dubai’s young population who are familiar with the virtual property, USH is in the process of developing and selling luxury digital properties as a non-fungible token with or without their physical twins. With this Dubai will become the second city in the world after Hampton in England where the metaverse mansion was put on sale in the form of Hampton Hall for £29 Million in February 2022

The rising adoption of Web3 and Non-Fungible Tokens (NFTs) among the corporate sector in Dubai has been the biggest driver. The real estate sector is expected to be the biggest beneficiary of Web3 adoption. Furthermore, there has been a substantial increase in the number of lenders who are willing to offer mortgages at fair rates to support investors in buying virtual properties. This will accelerate the pace and value of their virtual assets in the metaverse.

Dubai will also witness its first set of Non Fungible Tokens in July this year with only super-luxury properties located in The Palm Jumeirah, District One, Emirates Hills, and Dubai Hills Estates will be sold. Union Square House is in the process of turning it into reality and will replicate the success in Abu Dhabi and other major cities in the Middle East. 

Government Initiatives to Boost the Growth of Metaverse Mansions

Here is the list of initiatives launched by the Dubai government to boost Metaverse 

  • In April 2022, Dubai World Trade Centre launched MetaIncubator, the first Metaverse incubator in the Middle East. MetaIncubator was the first Metaverse Incubator in the Middle East with a mission to incubate early-stage Metaverse and Web3 projects through Dubai as a hub. It strengthens & supports the idea of Dubai’s digital strategy and offers world-class engineering, marketing, tokenomics, and investment services to startups. It also supports startups that want to get into the growing MENA regions. 
  • In March 2022, Dubai Municipality launched a programme called One Human Reality Talks. The programme aims to bring companies & investors together to develop & invest in new reality platforms.  

The Future of Metaverse Mansions in Dubai

There has been a substantial rise in the number of big real estate players betting their fortunes on Metaverse properties. Some of the biggest names include Emaar and Damac. Damac Group has entered the metaverse to build its own digital cities. The real estate developer has announced in April 2022 to invest US $100m in building metaverse digital cities. 

Dubai has gone one step far from the rest of the world by organizing Meta Ramadan Majlis (a traditional gathering) on Metaverse. The Meta Majlis was co-created by Chikara Global, a women’s group, and Biennale.io, a community-curated digital ecosystem. The Majlis witnessed the participation of experts and youth. There were discussions hosted on the future of communities and exploring more possibilities for community development in the Metaverse.

With an exponential rise in Metaverse mansions in the last two years, experts predict that Dubai will become a major metaverse hub in the Middle East soon. Dubai is designing the blueprint for the next phase of humanity’s virtual future with extended reality (XR). The government will work with investors and private sector firms to create a futuristic, human-centered version of the metaverse cities. Bedu, a UAE-based start-up focused on the metaverse decided to launch its operations in Dubai to make it a hub for emerging technologies. The company is a leader in Web3 technologies and solutions and will attract investments and talent from across the world to the UAE to boost metaverse activities, blockchain, NFTs, and Web 3 revolution in the region.

Metaverse mansions are gaining global attention. It is indeed a golden opportunity for the real estate sector to maximize its revenues. Dubai is emerging as a frontrunner in the race; however, the business climate is very dynamic with new activities & developments taking place every minute.