Asset Tokenization Widens Real Estate Investment Opportunity
Tokenization of real estate assets is becoming one of the most transformative applications of blockchain technology, with real property a key frontier. Deloitte’s FSI Predictions 2025 report, released on April 24, puts the potential for tokenized property at a staggering $4 trillion market by 2035. That estimate amounts to a staggering 27% compound annual growth rate from existing levels.
Already, the tokenized real estate market is worth around $300 billion in 2024, painting the picture of the growing adoption of blockchain-supported investment models by the real estate sector.
Tokenized Loans and Private Real Estate Funds will drive growth
Deloitte puts $1 trillion of the total eventual $4 trillion market at tokenized private real estate funds. Historically, those funds have been available to accredited investors only. With tokenization, potentially they could be sold to a far broader universe of investors worldwide.
Instead of buying traditional shares, investors would hold blockchain tokens that reflect ownership stakes or isolated units of a real estate portfolio. Tokens would be easily tradeable, giving more liquidity and lowering entry barriers for investors who couldn’t previously access private markets.
Moreover, tokenized securitization-linked loans, particularly in the mortgage-backed securities market, will contribute an estimated $2.39 trillion by 2035. Tokenization in this segment promises real-time payment information, increased transparency, and reduced operational costs.
Blockchain’s Benefits—and the Risks to Monitor
Blockchain’s use of real estate tokenization has several important advantages. It can automate back-office processes, eliminate middlemen, and expand investment opportunities to a broader and more diverse set of investors. Lower costs of transactions and greater traceability are also major benefits, as stated by Deloitte.
But the report also flags up a number of risks that the industry will have to avoid as it expands. Uncertainty about custody of assets, accounting processes, legal frameworks, and cybersecurity vulnerabilities remains urgent. These challenges will have to be dealt with if they are to build trust and ensure the long-term sustainability of tokenized real estate markets.
