The metaverse is being gradually expanded to prepare for a future in which users can enter and purchase a wide range of services. Land parcels and the infrastructure that goes with them will be in high demand. As a result, investments have already begun, and much more is on the way.
Rapid expansion
According to a recent study conducted by global market research firm Technavio, the value invested in metaverse real estate will increase to more than $5 billion by 2026.
According to Technavio, the factors driving this growth are the “growing popularity of mixed reality and cryptocurrency,” in that certain cryptocurrencies make it much easier to buy, sell, and rent metaverse real estate.
Challenges
Technavio cites real estate prices in the metaverse as one of the major challenges. There are currently large price fluctuations as buyers consider the scarcity and location of the land, as well as their perception of the long or short-term resale value.
Given the level of uncertainty in land plot prices, this may be discouraging for business buyers, who may be put off by wildly fluctuating price swings and thus refrain from making investments.
However, some very large companies, such as Meta (Facebook), Microsoft, and Nike, are investing in the metaverse, and with a likely upward trend in Web3 growth, this is likely to spur investment in the sector.
Geographically, where will the majority of investment come from?
North America is expected to receive the majority of investment and growth in the metaverse sector, according to Technavio. The United States and Canada are important real estate markets, with these two countries expected to account for 41% of all growth over the next four years.
This region’s market growth is expected to be much faster than that of South America, as consumers purchase “technologically advanced applications” and large brand names provide the impetus for early investment.
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