When we heard a property industry brand announcing that it had become the first amongst its peers to enter the metaverse by buying a digital plot on a virtual world this week, we decided that now would be the ideal time to check out property investment in the metaverse versus real-world bricks and mortar to see if property purchases in the metaverse could potentially make a sound property investment and to find out whether there are still some virtual real estate bargains to be had. Read on to see what we found.
First Property Portal to Buy Plot Of Real Estate in the Metaverse
MoveStreets, the property portal app, announced this week that it had purchased its very own digital plot of land on The Sandbox metaverse.
The Sandbox metaverse comprises a map made up of 166,464 virtual Lands that owners can build games and virtual buildings and throw events and parties on and also create digital assets (such as avatars, swords and clothing). These assets can all be monetised to earn the plot owner the metaverse’s native currency token SAND.
Each Land and the assets on that plot are sold as non-fungible tokens (more often referred to as NFTs) – NFTs are digital assets (such as a piece of art, a photo, a video, or piece of audio etc.) that are verified as unique by the Ethereum blockchain (a type of public digital ledger where transactions are logged, and details of ownership of the original asset is stored).
MoveStreets, which paid 8 Ethereum (the equivalent of $26,700 USD* [including gas, a fee for processing the transaction]) for one segment of LAND joins the likes of Atari, Adidas and OpenSea in owning real estate in The Sandbox metaverse. The property portal also bought a second plot of land for 7 Ethereum (ETH), which amounts to around $24K* including gas.
Although 26K sounds very expensive for a plot of real estate that only exists in the virtual world, the floor, the lowest price that a plot of The Sandbox land is currently trading for on the OpenSea Marketplace – a secondary market where Ethereum NFT holders can view and trade their NFTs – is (at the time of writing) 3.53 ETH ($11,509)*.
However, although buying off the floor sounds like a great deal, the value of The Sandbox land very much depends on what has been built on it and its position within the metaverse and whether it is a premium piece of land that is adjacent to a popular brand or a celebrity. For example, 3 plots of Land lying next to Snoop Dogg’s mansion in the Sandbox metaverse recently sold for a whopping $453K, $429K and 352K).
Much like the actual property market, buying real estate in The Sandbox and other virtual worlds, such as Decentraland, Axie Infinity and Alien Worlds, who owns the property you buy or who your neighbours are can dramatically impact the price you’ll pay. For example, the Fashion Street Estate in Decentraland (made up of 116 parcels of land) recently sold for $2.4 million; an Axie Infinity Genesis Plot sold for 550 ETH (approx. $2.33 million) while one estate on The Sandbox owned by gaming giant Atari was sold to Republic Realm (a virtual land investor) for an incredible $4.3 million.
Not every plot in The Sandbox metaverse has been sold since its launch in October 2021 (The Sandbox is selling them off slowly, this helps to hype the project) and demand is high with transactions on the secondary market extremely active with 1,021 NFTs sold, amounting to a $13.73m trading volume with an average price of $13.4K in the last 7 days alone, according to NFT Stats data.
The Sandbox total market history data via NonFungible (showing 140k sales, 24k owners, 65K sales on the secondary market since the metaverse’s launch on 18 October 2021) also suggests that demand for real estate on The Sandbox isn’t cooling off quite yet**.
Because of this incredible demand, we believe there may still be bargains** to be had in The Sandbox metaverse and other metaverses like it. The native tokens that power the transactions on these lands are also being traded at an incredible rate.
MoveStreets believes the metaverse could change the way we buy and sell homes as the industry continues to evolve to suit the habits of the modern-day homebuyer and seller.
Adam Kamani, CEO and Co-Founder property portal of MoveStreets, commented:
“We’ve seen how the digital disruption brought by the online property portal has dramatically improved the buying and selling process, allowing prospective buyers to search anywhere in the nation in far greater detail from the comfort of their home.
We believe the metaverse will be the next step in this user journey and so we made the decision to set up shop in The Sandbox to plan for the future and further our consumer offering.
While it is still very early days, we’re very excited about the possibilities we’ll be able to provide The Sandbox users.
This experience is set to be far more immersive compared to anything currently available and should take the concept of virtual viewings to a whole new level.”
Have you invested in digital real estate yet? As a property investor, would you also consider buying real estate in the metaverse? Would you search for a home in the real world via a virtual world property portal? We’d love to hear your views.
*Prices correct at the time of writing the article.
**Please note: This article does not provide financial advice. Please do your own research and note that the value of an investment may go down as well as up and you may not get back the money you invested.