10.01.2023

The Luxury Real Estate Market in the Metaverse

With this article we begin a virtual journey into luxury real estate through a sector that has recently been ‘discovered’ thanks to the development of new information technologies: the real estate market in the metaverse.

The real estate market in the metaverse is a growing trend, as is the luxury market in general. On these rampant technological platforms, more and more people are investing in virtual luxury houses: their prices are rising and continue to rise. From fashion brands to virtual land sellers, the metaverse seems to represent the next luxury frontier.

The luxury market in the metaverse

What could be more tangible than a valuable object or even a house? It may seem unbelievable, but by now not even luxury goods can escape the virtual world. In recent months, in fact, the metaverse – or more precisely, the various existing autonomous meta-verses – has become the scene of sales and purchases of luxury items and even villas and real estate. According to an estimate by financial operators, by 2030 the metaverse will account for more than 10% of the luxury goods market, to the tune of EUR 45 billion out of the more than 400 total in the sector. There are already a number of luxury brands that have equipped themselves to enter the metaverse and this shows that the market for luxury clothes and the most exclusive accessories is already flourishing in this sector.

Metaverse and luxury goods: market growth

The luxury goods par excellence in the real world are high-value real estate, i.e. luxury homes. And in the metaverse, too, this trend is gaining ground, as virtual land and villas have become a favourite investment of VIPs, private investors and large corporations in recent months. In fact, during 2021, an estimated EUR 500 million is estimated to have been spent on virtual real estate.

The trend is confirmed by other big names that have already purchased real estate in the metaverse, including footballers and tennis players, but also multinational companies such as Republic Realm, a real estate company that has already invested some USD 4.5 million to buy land on Sandbox, one of the most popular virtual real estate platforms, and already owns 2,500 plots of land in 19 different worlds. Investing in virtual real estate is therefore now an established reality.

How to buy and how much a virtual property costs

Those interested in buying real estate in the metaverse will need to have specific cryptocurrencies in their virtual wallets. Those who have the required amount of money for a certain virtual plot of land in their wallet will only have to access the websites of the various available platforms, select a plot of land and pay for it or, if necessary, participate in an auction to buy it. These virtual plots of land are, in fact, perimeters drawn on equally virtual maps and allow, once the purchase is complete, to build on them or in any case to carry out other operations aimed at increasing the value of the plot purchased. Of course, it is also possible to rent or sell already built real estate, even through consultants or dedicated real estate agencies.

There are currently a dozen platforms offering virtual real estate for sale (totalling about 270,000 units), but there are four main platforms on which to buy virtual land and real estate: Sandbox, Decentraland, Cryptovoxels and Somnium. Sandbox, the leading platform, accounts for 62 per cent of the market, with about 167,000 96×96-metre properties for sale at $12,700 each (as of December 2021). Uttopion, where it is possible to buy a plot of land for around EUR 2,000 to EUR 20,000, has also recently landed in the metaverse. But the number of real estate platforms in the metaverse and investors is growing daily, so much so that some speak of a virtual ‘real estate boom’.

Those with the money to do so are in fact buying real estate in the metaverse, especially not to miss the opportunity to invest in what seems to be the future of luxury goods. Buying a luxury home in the metaverse can in fact represent an excellent investment, as well as being a way to be the first to land in what seems to be one of the areas that will play a leading role in the years to come: the virtual world.