A recent study by Laurens Swinkels, Associate Professor in the section Finance at Erasmus School of Economics, offers the first comprehensive empirical analysis of tokenised real estate, shedding light on how blockchain technology is transforming property ownership and investment.
The study, published in Financial Innovation, focuses on 58 residential rental properties in the United States, primarily in Detroit, all tokenised by the real estate firm RealT between October 2019 and February 2021.
Tokenisation refers to a process that involves utilising new technologies, such as distributed ledger technology (DLT), to issue or represent assets in digital forms known as tokens. These tokens may represent existing assets – including financial assets such as securities or bank deposits and physical assets such as real estate – or new assets that represent a claim against the issuer.
Fragmented ownership and diversification
The study finds that tokenisation leads to highly fragmented ownership, with an average of 254 owners per property. Investors with over $5,000 in real estate tokens often diversify across multiple properties and cities, signaling a sophisticated approach to portfolio management.
Liquidity in the tokenised real estate market is dynamic, with tokens traded more frequently on decentralised exchanges. The study also notes that real estate token prices closely follow local house price indices, offering investors genuine economic exposure to housing markets.
While the market faces regulatory hurdles and limited liquidity compared to traditional assets, this research underscores the transformative potential of blockchain in democratising real estate investment.
A glimpse into the future of real estate investment
Swinkels’ study underscores the transformative potential of blockchain in the real estate sector. Tokenisation democratises access to property investment, enabling individuals with modest capital to participate in markets traditionally dominated by institutional investors. It also introduces greater liquidity, transparency, and efficiency into the real estate ecosystem.
Despite its current limitations—such as regulatory constraints, platform dependence, and market nascency—real estate tokenisation shows promise as a disruptive force in global finance. As technology and regulations evolve, tokenised assets may well become a mainstream component of diversified investment portfolios.
Additional information
An interesting read is this story on the website Outlier Media (published on 4 February 2025), including a reference to Swinkels paper. The article delves into the complex intersection of digital finance, speculative investment, and the human consequences unfolding on Detroit’s streets. According to the editor, tenants are the guinea pigs, confronted with neglected maintenance, unresponsive management, and eviction threats.
- More information
For more information, please contact Ronald de Groot, Media and Public Relations Officer at Erasmus School of Economics, rdegroot@ese.eur.nl, or +31 6 53 641 846.
