The Promise of Real Estate

Real estate’s scale and importance are unmatched, yet the asset class continues to operate with unusually low transaction velocity. On a global base of approximately $400 trillion, annual sales activity is estimated at only $1 trillion, implying a turnover rate of roughly 0.25%. This contrasts sharply with other asset classes: public equities frequently approach 100% annual turnover, and digital assets can exceed 500%.

These comparisons illustrate how limited real estate liquidity is today and highlight the potential efficiency gains that more digital, fractional, and interoperable market infrastructure could unlock.

An industry closely associated with real estate is the mortgage industry. Today, the US mortgage market alone stands at $21T (loans outstanding). According to US News, it takes up to 60 days to approve a mortgage, and costs nearly $9,500 per application. Despite this, only between 50-70% of applications get approved. This symbolizes a massive economic inefficiency in the market today, with many millions of lost time and paperwork.

DeFi applications such as Aave, Compound, and Morpho have proved how automated collateralized lending can operate at scale, reducing both approval and liquidation timelines from months to seconds and decreasing costs from thousands to near zero for the borrower. With the right trusted and timely infrastructure (valuation data) and an efficient liquidation mechanism through dedicated liquidators or deep secondary markets, DeFi can transform the largest lending sector in the world.