Deloitte Predicts Tokenized Real Estate Market Could Hit $4 Trillion by 2035
Real estate tokenization, once seen as a niche experiment, is rapidly gaining traction and could reshape the industry by 2035, according to a new report by Deloitte’s Center for Financial Services.
Deloitte predicts that the market for tokenized real estate could grow to an impressive $4 trillion by 2035, expanding at a compound annual growth rate (CAGR) of 27% from its current size of under $300 billion.
The tokenization of real-world assets (RWAs) is a dynamic sector that combines cryptocurrency technology with traditional finance. Tokenization involves converting tangible assets such as real estate, bonds, and funds into digital representations on the blockchain, which enhances liquidity, reduces transaction costs, and streamlines asset transfers.
For the real estate industry, tokenization offers significant operational benefits, such as simplified ownership transfers and more efficient capital management. The report explains how blockchain-based smart contracts can automate complex financial agreements, such as managing ownership stakes and facilitating capital flows within real estate funds. An example provided is Kin Capital’s $100 million real estate debt fund tokenized through the Chintai platform, utilizing trust-deed-based lending.
Deloitte outlines three key areas where tokenized real estate will have the greatest impact: private real estate funds, securitized loan ownership, and land development projects (including undeveloped or under-construction land). Among these, tokenized debt securities are expected to dominate, with an estimated market value of $2.39 trillion by 2035. Tokenized private funds could contribute around $1 trillion, while land development assets might account for roughly $500 billion.
However, despite the optimistic outlook, the report also highlights several challenges that must be addressed to fully realize the potential of tokenized real estate. These include regulatory uncertainty, asset custody concerns, cybersecurity threats, and dealing with default scenarios within the tokenized framework.
As the sector continues to evolve, tokenization is poised to transform real estate markets, offering greater access, efficiency, and transparency for global investors and stakeholders alike.
