By 2035, the Tokenized Real Estate Market Could Skyrocket to $4T, Deloitte Forecasts.

Deloitte Projects Tokenized Real Estate Market to Reach $4 Trillion by 2035

Real estate tokenization, once considered an experimental idea, is quickly evolving into a mainstream solution for financing, owning, and trading properties, according to a new report from Deloitte’s Center for Financial Services, released on Thursday.

The report forecasts that the market for tokenized real estate could grow to a staggering $4 trillion by 2035, expanding at an annual rate of 27%, from its current value of under $300 billion.

Tokenization of real-world assets (RWAs) is a rapidly expanding sector that merges blockchain technology with traditional finance. It involves converting physical assets like real estate, bonds, and funds into digital tokens on the blockchain, which enables faster, more efficient transactions and improves accessibility for investors.

For the real estate market, tokenization presents a range of advantages, including lower costs, faster settlements, and broader access to investment opportunities. The report highlights how tokenization can streamline complex financial transactions, with smart contracts on the blockchain automating everything from ownership transfers to managing capital flows. An example mentioned is Kin Capital’s Chintai platform, which tokenizes a $100 million real estate debt fund using trust-deed-based lending.

The Deloitte report divides tokenized real estate into three main categories: 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 be the largest segment, with a projected market value of $2.39 trillion by 2035. Private real estate funds are expected to contribute around $1 trillion, while tokenized land development projects may account for an additional $500 billion.

Despite the promising outlook, the report also identifies significant hurdles that could slow the growth of tokenized real estate. Key challenges include regulatory issues, asset custody concerns, cybersecurity risks, and managing defaults within the ecosystem.

As the industry matures, tokenization has the potential to transform the real estate market by increasing liquidity, simplifying transactions, and offering global access to real estate investments, marking a new era for the sector.