This opportunity will become available for office tenants and owners in one of Dubai’s business towers. Crypto currency: money of the future or just another bubble? Find all pros and cons of using Bitcoin for real estate buying and maintenance in our brief.
Dubai made the headlines around the world when it became one of the first global cities where residential properties could be bought and sold in bitcoin or similar digital currencies. In September last year, the Aston Plaza and Residences development in Dubai Science Park offered off-plan studios and one- and two-bedroom units for as much as 30, 50 and 70 bitcoins (USD 345,000), respectively. By that time, one bitcoin was worth around USD 4,940 (AED 18,142.15).
Now another developer, The Star Business Centre, which operates and leases fitted out offices in its buildings, announced it will accept cryptocurrencies as legal payment for rent and services rendered.
“We have recently been watching the cryptocurrency revolution and that encouraged us to enhance our business capability and align them with our business offering,” said Imran Farooq, CEO of Star Business Centre, which is part of the Samana Group.
After bitcoin surged up tremendously at the end of the previous year, the priciest 132.6-sq-m two-bedroom apartment on the 31st floor of the abovementioned Aston Plaza and Residences was already marketed for as low as 21.97 bitcoin, which was equivalent to AED 376,000 in December, 2017. Thus, Bitcoin is a highly volatile currency without any legal protections. Besides, many analysts believe cryptocurrencies to be just another bubble which is about to burst out soon.
So is it worth bothering with cryptocurrencies to buy real estate in Dubai?
Here are some pros and cons to using “digital money” in real estate transactions.
- Bitcoin transactions take mere minutes to process, and can be done from anywhere in the world at minimal or even zero fees. For property deals, the savings will be considerable.
- Real estate firms do not need to implement stringent payment card industry standards that are required for processing credit card data and other sensitive customer information. In fact, to process bitcoin deals, all you need is an app on a smartphone or tablet.
- Bitcoin is powered by blockchain, which stores multiple records of every transaction, making the property deals resilient to hacks or human errors.
- Once it is confirmed by the bitcoin network, the transaction becomes final and irreversible. So brokerages do not have to worry about fraud, consumer chargebacks or hackers using stolen credit cards.
- Since bitcoin is decentralised and not owned by any single entity, it is impervious to changing government policies, economic downturns, interest rates or hyper-inflation. For many, this makes bitcoin a truly global and safe currency to transact in.
- The legality of using bitcoin for real estate transactions remains ambiguous. While bitcoin is not considered illegal in most parts of the world, including the UAE, clear guidelines and regulations on its use are still a work in progress.
- For the government, it will be difficult to enforce tax laws on real estate transactions done by private parties.
- Since a bitcoin transaction cannot be reversed, property buyers need to be careful about investing in off-plan projects under construction — if the construction stalls or goes under, getting refunds could be difficult.
- Bitcoin transactions are not linked to any personally identifiable information, such as a name, email ID or address. While this protects users from identity theft, the anonymous nature of the transactions has also brought bitcoin notoriety — the cryptocurrency is reportedly being used for money laundering, drugs trade and tax evasion. So real estate firms might need to implement additional know your customer (KYC) checks for bitcoin-funded deals.
After all, the decision is yours, and IMEX Real Estate is always here to help you through the process of transacting real estate using cryptocurrency. Subscribe to our news to find out first about any changes in the use of bitcoins and other crypto currency for buying/selling real estate.