Democratizing Real Estate Investment: A Systematic Review of Tokenization in

Real Estate

Ahmad Al Izham Izadin*

Universiti Utara Malaysia
Rosylin Mohd Yusof
Universiti Utara Malaysia

Abstract

Purpose: This study reviews the current state of research on tokenization in real estate, focusing
on key trends, benefits, challenges, and future research opportunities. It examines how
technological, legal, and financial factors interact in the adoption of tokenization.

Design/methodology/approach: The study uses a structured methodology based on the PRISMA

framework and thematic analysis. It draws from 38 peer-reviewed articles and conference papers
in the Scopus database, covering research published up to 2024.

Findings: Six key themes emerged: streamlining real estate transactions through blockchain and
tokenization, enhancing transparency and security, increasing liquidity and democratizing
investments, addressing regulatory and legal challenges, technical and scalability issues, and
exploring social and economic impacts. Tokenization lowers barriers for small investors but faces
challenges such as the lack of standardized regulations between tokenization and traditional land
laws, and the absence of a centralized secondary market for trading real estate tokens. Empirical
studies are limited, with a need for more research on legal frameworks, investor behavior, and
market impacts.

Research limitations/implications: The study focuses on Scopus peer-reviewed literature to

maintain quality. Additionally, the current body of research is predominantly conceptual rather
than empirical, largely due to the limited access to secondary data on this topic.

Practical implications: Without proper regulation, tokenization may favor wealthier investors,
worsening financial inequality.

Originality/value: This review is one of the few to systematically analyze tokenization in real
estate, providing a valuable reference for future studies.

Keywords: Real estate, Tokenization, Blockchain, Systematic literature review, Fractional

ownership, PRISMA framework, Real estate investment.

JEL: G23, O33, R30

*Corresponding Author Email: ahmadalizham@gmail.com

1. Introduction

Blockchain technology has been a revolutionary force across many industries, fundamentally
transforming how transactions, ownership, and data management are conducted. Its
decentralization, immutability, and transparency make it especially attractive for sectors like real
estate, which are typically mired in inefficiencies and lack of trust. Mistrangelo et al. (2023)
emphasize that blockchain’s potential to streamline real estate transactions could bring enhanced
liquidity and transparency to the market. The shift from traditional, paper-based systems to digital
ledger technologies is echoed in the work of Swinkels (2023), who analyzes the ownership and
liquidity implications of tokenizing real estate assets. Collectively, these studies highlight how
blockchain could transform the real estate sector into a more efficient, accessible, and transparent
industry. Blockchain’s ability to maintain a secure, unalterable record of transactions plays a
crucial role in ensuring the trustworthiness of tokenized real estate assets. The process of
tokenization, in particular, benefits from blockchain’s core functionalities, allowing for fractional
ownership and increased liquidity.

Tokenization—the process of converting ownership rights of a physical asset into digital

tokens—offers groundbreaking potential in the real estate market. Baum (2021) and Swinkels
(2023) discuss how tokenization can make real estate assets more liquid by allowing fractional
ownership, which enables smaller investors to participate in markets that were previously
inaccessible to them. Tokenization democratizes investment, reducing barriers to entry, as
highlighted by Henker et al. (2023), who explore the potential of tokenization to bring inclusivity
into the real estate market, particularly in Germany. Additionally, Davydov and Yanovich (2020)
discuss the potential for tokenization to create diversified financial instruments, which could
further boost the attractiveness of real estate investment by allowing assets to be traded on
secondary markets, similar to stocks. Mohd Yusof et al. (2023) highlight how blockchain, big data,
and artificial intelligence can combine to democratize Islamic home financing, offering a model
that integrates liquidity, marketability, and sustainability for homebuyers through tokenization.
These studies underline the importance of tokenization in not only expanding access to real estate
investments but also in fostering liquidity and financial innovation within the sector.

Despite its immense potential, tokenization in real estate faces several barriers. Regulatory
frameworks remain a significant hurdle. Garcia-Teruel (2020) and Mistrangelo et al. (2022) point
out that current property laws are not well-equipped to accommodate digital tokens that represent
ownership rights, leading to legal uncertainties for both investors and developers. Furthermore,
Davydov and Yanovich (2020) raise concerns about the scalability of blockchain platforms and
whether they can effectively manage large-scale real estate transactions. Swinkels (2023) also
notes that, while real estate tokenization promises increased liquidity, the volatility of token prices
and the lack of established secondary markets present significant risks for investors. These
challenges indicate that while the technology has potential, it is still in its infancy and requires
substantial advancements in both technical infrastructure and regulatory clarity to reach
mainstream adoption.

These fragmented insights across the technical, regulatory, and financial aspects of real
estate tokenization emphasize the need for a comprehensive systematic review to consolidate and
synthesize the existing body of knowledge. While various studies have explored different facets
of tokenization—such as technological challenges, legal frameworks, and potential financial
benefits—the research remains disjointed, leaving critical gaps in understanding how these aspects
interrelate. To address these gaps, this systematic literature review is guided by three key research
questions: (i) what are the key trends and focus areas in the existing literature on real estate
tokenization?; (ii) what are the perceived advantages and challenges of real estate tokenization
according to existing studies?; and (iii) what are the unresolved issues and unexplored
opportunities for future research on real estate tokenization? By answering these questions, the
review aims to provide a clearer picture, identify key themes, and highlight critical opportunities
for future research.

2. Methodology

This study aims to conduct a systematic literature review to explore the existing research on
tokenization in real estate. To achieve this, a combination of systematic review methods, following
the PRISMA framework (Moher et al., 2009) and thematic analysis will be employed. The
PRISMA approach ensures transparency and replicability in identifying and screening relevant
studies and provides insights into research trends (Patel et al., 2022). Additionally, thematic
analysis (Braun & Clarke, 2006) will be used to assess the content of the selected literature by
identifying recurring themes and patterns related to tokenization in real estate. This approach
allows for the exploration of key concepts such as the benefits, challenges, and future research
opportunities in the field. Thematic analysis will help organize the findings to directly address the
research questions, revealing both consolidated views and gaps in the literature. This mixed-
methods approach facilitates a comprehensive examination of both the scope and depth of
literature on tokenization in real estate (Mishara & Mishra, 2023).

2.1 Data Sources and Search Terms

The data for this systematic literature review will be sourced from Elsevier's Scopus database,
selected for its comprehensive coverage of peer-reviewed journals and conference proceedings
across a broad range of disciplines. Scopus is well-regarded for bibliometric studies because it
aggregates publications from various academic publishers, ensuring that a diverse and extensive
range of scholarly output is accessible (Patel et al., 2022; Parlina et al., 2020). This extensive
coverage is essential for a study like this, which aims to capture the current state of research on
tokenization in real estate. By utilizing Scopus, the review ensures access to high-quality, reputable
sources, which strengthens the validity and depth of the analysis (Falagas et al., 2008).
Additionally, Scopus's strong indexing capabilities allow for accurate tracking of citation patterns,
author collaboration, and research trends, making it ideal for the bibliometric aspect of this review
(Mongeon & Paul-Hus, 2016).

The search process will be conducted using the following string: TITLE-ABS-KEY
("tokenization" AND "real estate" OR "house" OR "home"). This search string is designed to
capture articles that specifically address tokenization within the context of real estate and related
fields, such as housing or home ownership. The search will be restricted to articles published in
English and limited to peer-reviewed journal articles and conference papers to ensure that only
academically validated research is included in the review. This restriction ensures that the findings
are drawn from rigorously evaluated studies, maintaining the quality and reliability of the literature
included (Patel et al., 2022; Pickering & Byrne, 2014). In addition to filtering by language and
type of publication, using a systematic search string helps ensure that the most relevant literature
is retrieved, minimizing the risk of missing important studies (Boeker et al., 2013). This approach
allows for a focused and methodologically sound exploration of tokenization, providing insights
into its application and potential impact in the real estate sector.

2.2 Inclusion and Exclusion Criteria

The inclusion criteria for this systematic literature review were carefully designed to ensure
relevance, academic rigor, and alignment with the research objectives on tokenization in real
estate. The data extraction occurred on 13 September 2024 using the Scopus database, which is
known for its extensive coverage of peer-reviewed journals and conference papers across multiple
disciplines (Patel et al., 2022; Parlina et al., 2020). Only peer-reviewed journal articles and
conference papers written in English were included, ensuring consistency and scholarly reliability
(Pickering & Byrne, 2014). No restrictions were placed on the publication period, allowing the
inclusion of all relevant studies available until the extraction date. Both empirical and conceptual
studies were considered, provided they contributed to understanding the application of
tokenization in real estate or related concepts such as the tokenization of houses or homes. The
selection process involved a comprehensive screening of titles, abstracts, keywords, and full texts,
with the aim of ensuring that each paper addressed key themes relevant to the research framework
(Moher et al., 2009).

The exclusion criteria were equally stringent to maintain focus and quality. Studies that
were not directly relevant to the research question or peripheral to the primary topic of tokenization
in real estate were excluded. Grey literature, such as reports, dissertations, and non-peer-reviewed
sources, was omitted to ensure only academically validated studies were analyzed, a common
practice to ensure high-quality literature reviews (Snyder, 2019). Additionally, duplicated studies
were removed to avoid redundancy in the analysis. After applying these criteria, each selected
paper underwent a detailed evaluation of its methodological soundness and relevance, ensuring
that the findings aligned with the research objectives and provided meaningful contributions to the
field of tokenization in real estate (Tranfield et al., 2003).
 Figure 1. Search and Selection Process

Source: Authors' compilation

As illustrated in Figure 1, an initial search in the Scopus database yielded 96 articles based
on keyword searches related to tokenization and real estate. After excluding studies based on
language and publication type, 74 papers remained. A further screening, based on titles and
abstracts, and the application of exclusion criteria, reduced the number to 41 articles. These
remaining articles were then assessed for full-text eligibility, leading to the exclusion of 3
additional papers that did not align with the research objectives. Ultimately, 38 articles were
included in this review, comprising both conceptual and empirical studies on real estate
tokenization.

3.0 Findings
This section delves into the results of the analysis and synthesis of literature on tokenization in real
estate, offering a comprehensive understanding of the topic based on existing studies. To provide
clarity and structure, this section is divided into two key parts: systemic analysis and thematic
analysis. The systemic analysis will focus on the overall research trends and patterns observed in
the literature, including the volume of publications, types of research conducted (conceptual versus
empirical), and geographic distribution of studies. This approach will help contextualize the
evolution of the research field over time and highlight gaps in the literature. Meanwhile, the
thematic analysis will provide a deeper exploration of the core themes identified in the literature,
such as streamlining real estate transactions, enhancing transparency and security, addressing
regulatory and legal challenges, and the broader social and economic impacts of tokenization. By
dividing the discussion into these two sections, we can systematically examine the field from both
a macro-level research perspective and a detailed thematic viewpoint, ensuring a well-rounded
understanding of the current state of knowledge and identifying areas for future inquiry.

3.1 Systematic Analysis

3.1.1 Number of Publications by Year

Figure 2 illustrates the number of publications related to tokenization in real estate from 2020 to
2024, based on data collected for this systematic literature review. The trend indicates a steady
increase in research output over the years, peaking in 2023 with 12 articles. In 2020, there were
approximately three published articles, reflecting an initial academic interest in this emerging
topic. By 2021, the number of publications rose to five, and this growth continued into 2022 with
nine publications. The significant increase in 2023 suggests an accelerating academic and industry
focus on blockchain and tokenization technologies in real estate. Although the number of
publications in 2024 appears lower, it is important to note that the year is not yet complete, and
additional publications may emerge by the year’s end.

Despite the emergence of cryptocurrency in 2008, studies specifically focusing on the

tokenization of real estate only began to appear in 2020, according to this review. The delayed
focus on this application may be attributed to the time required for blockchain technology to evolve
and for its potential applications in the real estate sector to be recognized. Early studies, such as
Gupta et al. (2020), introduced Ethereum-based solutions aimed at improving liquidity through
tokenization, signaling the beginning of scholarly interest in practical applications. Baum (2021)
expanded this discourse by exploring the potential for tokenization to enable fractional real estate
ownership. The increasing number of publications post-2020, as seen in works like Swinkels
(2023) and Mistrangelo et al. (2022), reflects growing recognition of tokenization’s transformative
potential within the real estate industry. This upward trajectory in research output suggests that
blockchain and tokenization are gaining momentum as innovative approaches in the real estate
market.
 Figure 2. Number of Publications by Year

Source: Authors' compilation

3.1.2 Number of Publications by Country

The bar chart shows the distribution of publications on tokenization in real estate by country,
highlighting that India leads with seven publications, followed by the United Kingdom with six.
Spain and Italy each have four publications, while the United States and the Russian Federation
both have three. Several countries, including Sweden, Pakistan, and Finland, have two publications
each, while many others, such as Netherlands, Singapore, and Portugal, contribute one publication.
This distribution suggests that research on tokenization in real estate is globally dispersed but
concentrated in certain regions, particularly in countries like India and the UK, which have shown
strong academic or industrial interest in blockchain technologies. For example, studies like Gupta
et al. (2020), which explore Ethereum-based real estate tokenization, are representative of India's
interest in leveraging blockchain for real estate. Similarly, the UK's growing focus on tokenization
can be seen in works like Baum (2021), which discusses fractional real estate ownership. The wide
range of countries represented in the chart indicates that tokenization is being explored from
various geographic perspectives, with different legal, economic, and technological contexts
shaping the research, as seen in broader studies like Saari et al. (2022) and Mistrangelo et al.
(2022).
 Figure 3. Number of Publications by Country

Source: Authors' compilation

3.1.3 Type of Publications Analysis

The nearly balanced distribution between journal articles (52.6%) and conference papers (47.4%)
shown in Figure 4 indicates that research on real estate tokenization is in a dynamic stage of
evolution. The substantial proportion of conference papers highlights the exploratory nature of
much of the research, where findings are rapidly shared within academic and professional
communities. Conferences serve as platforms to present innovative ideas and early findings, which
is essential in an emerging field such as blockchain and tokenization in real estate. For example,
early works like Gupta et al. (2020) and Serrano (2022) were disseminated through conference
venues, marking the initial exploratory phase of blockchain applications in real estate. However,
the slightly higher percentage of journal articles signifies a transition toward more mature, peer-
reviewed studies that delve deeper into theoretical exploration and practical applications. Recent
works like Baum (2021) and Saari et al. (2022) showcase this trend, providing in-depth analyses
and empirical insights, suggesting that the field is progressing toward a more established academic
discourse. This balance between conference papers and journal articles indicates the evolving
nature of the research, blending theoretical exploration with emerging practical findings.

Figure 5 reveals a clear dominance of conceptual studies over empirical ones, with 68.4%
of research being conceptual and only 31.6% empirical. This suggests that the field of real estate
tokenization is still largely focused on theoretical models, frameworks, and ideas rather than on
data-driven, practical applications. Much of the literature has been devoted to establishing
foundational theories, such as Garcia-Teruel’s (2020) discussion of legal challenges or Crandall’s
(2023) exploration of financialization risks associated with tokenization. These theoretical
explorations provide a necessary foundation for understanding the potential of blockchain in real
estate, but the lack of empirical research highlights a significant gap between theory and practice.
As empirical studies, such as Swinkels (2023), begin to emerge, they provide concrete data on the
ownership and liquidity of tokenized real estate assets. The growing need for more empirical
research indicates an opportunity for further studies to validate and apply these theoretical
frameworks, especially as more data becomes available and tokenization gains broader adoption
in the real estate market.

Figure 6 illustrates the year-over-year growth in both conceptual and empirical studies,
with 2023 witnessing a significant peak. This upward trend suggests a growing recognition of
blockchain’s potential to transform the real estate industry, with an increase in both theoretical
exploration and practical applications. While conceptual studies have consistently led the way, the
rise in empirical research in 2023, as evidenced by studies like Swinkels (2023), shows that real-
world data is starting to inform the discussion around tokenization’s practical impact. The
noticeable growth in empirical research indicates that the field is moving beyond theory and
toward the validation of key concepts through data. However, it is important to note that the 2024
data, as of 13 September, is incomplete, and more publications are likely to emerge by the year’s
end. This means that 2024 will likely continue the upward trajectory seen in previous years. The
steady growth of both conceptual and empirical studies highlights the increasing importance of
tokenization in real estate and suggests that the field will continue to evolve, with more empirical
research needed to address practical challenges, regulatory hurdles, and scalability issues as
tokenization becomes more mainstream.

Figure 4. Type of Publication

Source: Authors' compilation

 Figure 5. Conceptual vs Empirical Studies by Percentage

Source: Authors' compilation

Figure 6. Conceptual vs Empirical Studies by Year

Source: Authors' compilation

3.1.4 Top Cited Publications

Table 1 provides an overview of key publications on the topic of tokenization in real estate. Garcia-
Teruel (2020) has the highest citation count, with 70 citations, demonstrating the influence of this
paper on the legal challenges and opportunities of blockchain technology in the real estate sector.
This high citation count reflects the significance of legal frameworks and the role of blockchain in
transforming traditional real estate transactions, as discussed by Garcia-Teruel. Similarly, Saari et
al. (2022), which focuses on the recent developments and empirical applications of blockchain in
real estate, has garnered 33 citations. The attention to this paper suggests that empirical
applications of blockchain are gaining traction, even though many of its proposed benefits remain
largely theoretical, as Saari et al. noted in their systematic review of blockchain literature.

Publications with moderate citation counts, such as Baum (2021) with 21 citations, explore
the future of real estate investment through tokenization, highlighting the growing interest in
fractional ownership models. Other papers, such as Gupta et al. (2020) with 31 citations, delve into
the technical side of tokenization by discussing Ethereum blockchain-based solutions for real
estate investments. The relatively lower citation counts of newer studies, such as Chow & Tan
(2022) and Swinkels (2023), which focus on tokenization in the Asia-Pacific region and empirical
evidence from U.S. residential markets, respectively, indicate that these areas of study are still
emerging and have yet to fully influence the broader research community. These papers, together
with Serrano (2022) and Davydov & Yanovich (2020), which investigate NFTs and financial
instruments in real estate, contribute to the growing body of literature, emphasizing the
technological innovations that support real estate tokenization.

Table 1. Top Cited Publications

Authors & Year Title Journal Citations

Garcia-Teruel, Legal challenges and opportunities of Journal of Property, Planning 70
R.M. (2020) blockchain technology in the real estate and Environmental Law
sector
Saari, A.; Vimpari, Blockchain in real estate: Recent Land Use Policy 34
J.; Junnila, S. developments and empirical applications
(2022)
Garcia-Teruel, The digital tokenization of property Computer Law and Security 33
R.M.; Simón- rights. A comparative perspective Review
Moreno, H. (2021)
Gupta, A.; Rathod, Tokenization of real estate using Applied Cryptography and 31
J.; Patel, D.; et al. blockchain technology Network Security
(2020) Workshops: ACNS 2020
Satellite Workshops,
AIBlock, AIHWS, AIoTS,
Cloud S&P, SCI, SecMT,
and SiMLA
Baum, A. (2021) Tokenization—The future of real estate Journal of Portfolio 21
investment? Management
Swinkels, L. Empirical evidence on the ownership and Financial Innovation 17
(2023) liquidity of real estate tokens
Chow, Y.L.; Tan, Is tokenization of real estate ready for lift Journal of Property 11
K.K. (2022) off in APAC? Investment and Finance
Serrano, W. (2022) Real Estate Tokenisation via Non ACM International 10
Fungible Tokens Conference Proceeding
Series
Joshi, S.; Tokenization of Real estate Assets Using International Journal of 6
Choudhury, A. Blockchain Intelligent Information
(2022) Technologies
Davydov, V.; Financial Instruments Generation via 2020 2nd Conference on 6
Yanovich, Y. Tokenization into Commodity Blockchain Research and
(2020) Applications

Source: Authors' compilation

3.2 Thematic Analysis

The evolution of real estate tokenization research from 2020 to 2024 highlights the growing
recognition of blockchain technology’s potential to transform the sector. In 2020, foundational
studies like Garcia-Teruel (2020) explored how smart contracts could streamline cross-border real
estate transactions by reducing intermediaries and addressing legal challenges in the European
context. Gupta et al. (2020) provided empirical evidence that tokenization could improve liquidity
through fractional ownership, enabling broader investor participation. In 2021, researchers such as
Garcia-Teruel & Simón-Moreno (2021) expanded the conversation by analyzing the legal
complexities of tokenizing property rights across different jurisdictions. Baum (2021) focused on
how blockchain could democratize real estate investment by facilitating fractional ownership,
while Kasprzak (2021) explored the financialization of residential real estate, suggesting that
traditional financial institutions could integrate blockchain into their digital transformation
strategies, thereby broadening access to real estate markets and improving liquidity for smaller
investors.

By 2022 and 2023, research increasingly focused on practical applications and the social
impact of tokenization in real estate. Chow & Tan (2022) and Saari et al. (2022) discussed the
incremental adoption of blockchain, showing how it added efficiency to real estate transactions
without completely overhauling existing systems. The role of non-fungible tokens (NFTs) and
security tokens became more prominent, as explored by Serrano (2022) and Fujimoto & Omote
(2022). Empirical studies, like Swinkels (2023), began providing concrete data on the liquidity
and ownership of the tokenized real estate, demonstrating that these assets were influencing
investment behaviors. Additionally, Baptista et al. (2023) and Crandall (2023) examined the
democratization of real estate investment, particularly for smaller investors, while raising concerns
about potential financialization. These studies collectively illustrate a shift toward recognizing
blockchain’s broader societal and economic implications for real estate, particularly in terms of
accessibility and transparency. Below is a summary of the themes and key findings based on the
systematic literature review.
 Table 2. Themes & Key Findings

Themes Key Findings Authors and Years

Streamlining Real Blockchain can reduce intermediaries (agents, Garcia-Teruel (2020), Joshi
Estate notaries) and improve transaction efficiency & Choudhury (2022), Gupta
Transactions through smart contracts, reducing time and et al. (2020), Serrano
Through costs. (2022), Saari et al. (2022),
Blockchain and Pocha et al. (2023), Exter &
Tokenization Radosavljevic (2023)
Enhanced Blockchain enhances transparency by creating Saari et al. (2022), Serrano
Transparency and tamper-proof, immutable records, which (2022), Joshi & Choudhury
Security in Real reduces fraud and ensures secure transactions. (2022), Fujimoto & Omote
Estate (2022), Hassan et al. (2024),
Transactions Sharma et al. (2024)
Tokenization for Tokenization increases liquidity by allowing Baum (2021), Gupta et al.
Increased fractional ownership, making real estate (2020), Chow & Tan
Liquidity and investments accessible to smaller investors. (2022), Swinkels (2023),
Democratization Mistrangelo et al. (2022),
of Real Estate Mottaghi et al. (2024),
Investment Henker et al. (2023)
Mohd Yusof et al. (2023)
Regulatory and Blockchain adoption is slowed by regulatory Garcia-Teruel & Simón-
Legal Challenges and legal hurdles, including defining the legal Moreno (2021), Avci &
status of tokenized assets and smart contracts. Erzurumlu (2023), Henker
et al. (2023), Chao et al.
(2022)
Technical and Adoption is limited by technological Saari et al. (2022), Fujimoto
Scalability Issues challenges, including the need for robust & Omote (2022), Henker et
infrastructure, reliable digital data, and al. (2023), Oza et al. (2024)
scalability.
Social and Blockchain and tokenization can democratize Baptista et al. (2023), Creta
Economic Impacts real estate investments, increasing access for & Tenca (2021),
smaller investors and promoting financial Mistrangelo et al. (2022),
inclusion. However, concerns remain about Crandall (2023), Mohd
potential increased financialization. Yusof et al. (2023)

Source: Authors' compilation

3.2.1 Streamlining Real Estate Transactions Through Blockchain and Tokenization

The integration of blockchain and tokenization has shown significant potential to streamline real
estate transactions by reducing the reliance on intermediaries such as agents, notaries, and
conveyancers. Garcia-Teruel (2020) and Joshi & Choudhury (2022), highlight how smart contracts
can automate complex real estate processes, eliminating the need for middlemen and reducing the
time required to complete transactions. Garcia-Teruel (2020) specifically underscores the legal
challenges of adopting blockchain in European-wide transactions, where the current system
involves multiple intermediaries and added complexity for cross-border operations. Blockchain’s
ability to facilitate more secure, transparent, and quicker transactions across borders is seen as a
significant benefit, although it is critical that legal frameworks evolve to support these
technologies. Similarly, Joshi & Choudhury (2022) emphasize that blockchain’s immutable nature
and smart contracts can solve transparency issues and reduce costs, streamlining transactions by
automating processes and reducing administrative overheads.

In addition to reducing intermediary roles, blockchain offers enhanced transaction

efficiency through tokenization, which allows real estate assets to be fractionalized and traded
more flexibly. Gupta et al. (2020) and Serrano (2022) delve into how blockchain, particularly
through Ethereum smart contracts and Non-Fungible Tokens (NFTs), can revolutionize real estate
ownership by allowing fractionalized, tokenized assets to be securely transferred without
traditional brokers or notaries. This innovation improves market liquidity, making it easier for
smaller investors to enter the real estate market. Furthermore, Serrano (2022) notes that
tokenization through NFTs provides a secure, decentralized platform for managing real estate
information, enabling stakeholders like investors, property managers, and insurers to interact
without third-party verification. By eliminating inefficiencies related to document verification and
registration, tokenization creates a more fluid and cost-effective real estate marketplace.

However, the empirical applications of blockchain in real estate suggest that its adoption
is more incremental than transformative. As Saari et al. (2022) and Exter & Radosavljevic (2023)
point out, while blockchain's theoretical potential to overhaul the industry is vast, in practice, it is
often implemented as an additional layer within existing systems rather than a full replacement.
Saari et al. (2022) found that real-world applications of blockchain mostly focus on land
administration and operate in hybrid settings, where blockchain adds efficiency and transparency
without entirely removing traditional processes. Exter & Radosavljevic (2023) expand on this by
illustrating how blockchain can create transaction symmetry and reduce costs, especially in
commercial real estate. Still, widespread adoption is constrained by governance, scalability, and
regulatory compliance. This points to the need for political will, educational efforts, and robust
legal frameworks to realize blockchain's full potential in streamlining real estate transactions.

3.2.2 Enhanced Transparency and Security in Real Estate Transactions

Blockchain and tokenization are becoming integral in enhancing transparency and security in real
estate transactions by creating tamper-proof and immutable records. Saari et al. (2022) investigate
the recent developments in blockchain applications within real estate, specifically focusing on how
blockchain can address transparency issues, inefficiencies, fraud, and trust deficits. Their research
points out that blockchain holds potential for increased transparency by creating immutable
transaction records, which can significantly reduce fraud and corruption in real estate transactions.
The authors highlight the practical benefits, particularly in land administration, where blockchain's
transparency ensures that records are accurate and verifiable. Although empirical applications are
still limited, the use of blockchain for secure record-keeping offers promising insights into its
potential to transform real estate.

Serrano (2022) and Joshi and Choudhury (2022) explore the use of Non-Fungible Tokens
(NFTs) and smart contracts in real estate, which further enhances transparency. Serrano (2022)
focuses on how NFTs can decentralize real estate data storage, ensuring secure, tamper-proof
records of transactions and property details. This mechanism reduces the need for intermediaries
and creates a more transparent system for all stakeholders involved. Joshi and Choudhury (2022)
extend this concept by demonstrating how blockchain, smart contracts, and tokenization can solve
issues related to real estate ownership by providing immutable records, reducing fraud, and
increasing trust among participants in the ecosystem. Their framework proposes that these
technologies can lower administrative burdens while ensuring that transactions are transparent and
secure.

Fujimoto and Omote (2022), Hassan et al. (2024), and Sharma et al. (2024) apply
blockchain and NFTs to real estate tokenization, focusing on the security and transparency of
ownership records. Fujimoto and Omote (2022) propose a smart contract-based system for
managing security tokens, emphasizing how blockchain can ensure secure and transparent asset
transfers, even for high-value assets like real estate. Hassan et al. (2024) develop the "My Real
Estate" platform, which uses NFTs to enable fractional ownership and ensures that ownership
records are both transparent and fraud-proof. Sharma et al. (2024) take this further by proposing a
platform that ties property ownership to NFTs, ensuring that records are secure, immutable, and
resistant to fraud. This enhances both the transparency and security of real estate transactions,
making the process more efficient and reliable.

3.2.3 Tokenization for Increased Liquidity and Democratization of Real Estate

Investment

Tokenization in real estate has the potential to significantly increase liquidity by allowing
fractional ownership, making it more accessible to a wider range of investors. Studies like Gupta
et al. (2020) and Baum (2021) emphasize how tokenization addresses the liquidity challenges
inherent in traditional real estate investment. By breaking down high-value assets into smaller,
tradeable tokens, investors with lower capital can enter the market, thereby democratizing
investment. Gupta et al. (2020) describe how blockchain-based security tokens, backed by real-
world assets, create liquidity by allowing these tokens to be traded on secondary markets.
Similarly, Baum (2021) highlights how fractional ownership via tokenization lowers the barriers
to entry for small investors, enabling them to diversify their portfolios with relatively modest sums
of money.

The concept of democratization in real estate through tokenization is further supported by

research from Swinkels (2023) and Chow & Tan (2022). Swinkels (2023) provides empirical
evidence on the fragmented ownership of tokenized residential properties, demonstrating that
property ownership changes frequently, which in turn boosts liquidity. Chow & Tan (2022) explore
how platforms in the Asia-Pacific region have successfully implemented tokenized real estate,
making the asset class accessible to smaller investors and those in less capitalized markets. These
studies highlight how tokenization lowers financial barriers, enabling a wider demographic of
investors to participate in real estate, traditionally a market limited to high-net-worth individuals.

Furthermore, Mistrangelo et al. (2022), Henker et al. (2023), and Mohd Yusof et al. (2023)
provide evidence of how tokenization can foster inclusion and financial accessibility. Mistrangelo
et al. (2022) propose a framework for tokenization that promotes inclusivity by allowing actors
with various financial backgrounds to participate in real estate ownership through NFTs. Henker
et al. (2023) focus on Germany’s regulatory framework that supports real estate tokenization,
making it easier for small-scale investors to own fractions of real estate. Similarly, Mohd Yusof et
al. (2023) discuss the use of blockchain to democratize Islamic home financing, enhancing
liquidity and affordability through fractional ownership. Together, these studies demonstrate that
tokenization democratizes real estate investment by creating opportunities for smaller investors,
promoting financial inclusion and increased liquidity across the market.

3.2.4 Regulatory and Legal Challenges in Real Estate Tokenization

Tokenization in real estate offers transformative potential by enabling fractional ownership and
streamlining property transactions, but regulatory and legal challenges continue to slow its
widespread adoption. Garcia-Teruel & Simón-Moreno (2021) address the legal ambiguities
surrounding the tokenization of property rights, particularly in cross-border real estate transactions.
They highlight the challenge of defining the legal status of digital tokens, which represent
ownership or other rights over physical assets. These tokens raise questions about their validity in
decentralized systems, where traditional intermediaries such as notaries and land registrars may
not be involved. The study proposes that private law must adapt to accommodate these new forms
of property rights, but notes that until clearer legal frameworks are established, the full potential
of tokenization will be difficult to achieve.

Further complicating the issue, Avci & Erzurumlu (2023) explore legal design challenges
in tokenized real estate investments, particularly in crowdfunding contexts. They propose a
blockchain-based security token offering (STO) structure that allows fractional ownership while
addressing the legal complexities of transferring property rights. This model draws on Islamic
finance principles, specifically Sukuk, to offer investors legal protections and improve transaction
efficiency. However, the study points out that the lack of regulatory clarity and the slow pace of
legal reform hinder the broader adoption of such tokenized assets. While tokenization promises
increased transparency and liquidity, regulatory frameworks remain insufficient to address issues
like investor protection, liability, and the legal recognition of tokenized ownership.

Henker et al. (2023) and Chao et al. (2022) further emphasize the importance of regulatory
frameworks in realizing the full potential of real estate tokenization. Henker et al. (2023) explore
tokenization in the German real estate market, highlighting how the 2021 Electronic Securities Act
provides a foundation for tokenized assets but remains limited in scope. Legal hurdles around the
recognition of tokenized ownership and the management of digital assets still require significant
development. Similarly, Chao et al. (2022) focus on how blockchain-based regulatory technology
(RegTech) can streamline real estate transactions, particularly in the mortgage sector. However,
the study highlights that legal and regulatory alignment is critical for RegTech solutions to
succeed, as blockchain-based systems must integrate with existing compliance requirements.
Collectively, these studies demonstrate that while tokenization can democratize real estate
investment and improve transaction efficiency, regulatory and legal barriers remain substantial
obstacles to its full implementation.

3.2.5 Technical and Scalability Issues in Real Estate Tokenization

Scalability remains a fundamental challenge in implementing blockchain technology for real estate
tokenization. Saari et al. (2022) highlight that, although blockchain can improve transparency and
efficiency, most applications in real estate have been small-scale or hybrid solutions. Larger and
more complex transactions still require significant advancements in digital infrastructure to ensure
that blockchain systems can handle the increased demands. This is further complicated by the need
for seamless integration with legacy systems, which are often fragmented and difficult to update.
The limitations of current blockchain infrastructure mean that, while theoretical benefits are clear,
practical applications are often constrained. As the real estate sector deals with vast amounts of
data and numerous stakeholders, ensuring that the blockchain system can scale without sacrificing
speed, transparency, or security is critical for its wider adoption.

Fujimoto and Omote (2022) focus on the scalability limitations of security token offerings
(STOs) within the real estate sector. Their study suggests that blockchain's current capabilities are
insufficient to handle the operational demands of larger real estate transactions, particularly when
it comes to smart contracts. Although smart contracts can streamline the process, their execution
becomes problematic as the volume of transactions increases. To address this, the authors propose
the development of more advanced smart contract systems that can interwork with multiple
blockchain ledgers, enhancing their functionality and scalability. However, even with these
innovations, the real estate industry’s broad adoption of STOs still faces significant technological
challenges. Scalability not only depends on blockchain’s processing power but also on legal and
regulatory frameworks, which are currently underdeveloped in most jurisdictions, further
complicating the full deployment of these systems.

In Germany, Henker et al. (2023) explore the technical and legal limitations of tokenizing
real estate, particularly under the framework of the Electronic Securities Act. Despite regulatory
support, the scalability of blockchain technology in real estate remains a pressing issue. Managing
high transaction volumes while ensuring legal compliance and transparency requires a
sophisticated digital infrastructure that is currently lacking. Oza et al. (2024) similarly point out
that while blockchain-based projects like Blockrealty offer promising solutions for real estate
tokenization, scaling these platforms to manage a broad market of transactions presents numerous
challenges. Adding to this, Waher et al. (2022) emphasize the difficulty of integrating blockchain
with Internet of Things (IoT) devices and digital twins in smart cities. The need for interoperable
systems capable of handling vast amounts of real-time data underscores the complexity of scaling
blockchain technology in the real estate sector. Addressing these issues is essential for real estate
tokenization to achieve widespread practical use.

3.2.6 Social and Economic Impacts: Democratization and Inclusion in Real Estate
Markets

Blockchain technology, especially through tokenization, has the potential to democratize real
estate investment by lowering barriers for smaller investors. In their study, Baptista et al. (2023)
demonstrate how blockchain, through smart contracts and tokenization, can make real estate
investments more accessible. This technology allows fractional ownership, where investors can
buy smaller portions of real estate, making previously exclusive markets more inclusive. Creta and
Tenca (2021) also highlight the role of tokenization in real estate crowdfunding, where multiple
smaller investors can participate in larger projects, diversifying risks and creating more investment
opportunities. This increased accessibility, paired with the efficiency blockchain brings by
reducing intermediaries, presents a strong case for blockchain's role in making real estate markets
more inclusive for all investor types. However, the growing dominance of large investors and
concerns about speculative behavior signal potential risks to smaller players despite blockchain’s
inclusiveness.

Despite its potential to promote financial inclusion, blockchain-driven tokenization also

risks increasing financialization in the real estate sector. Crandall (2023) cautions that
tokenization, while promising democratization, can also contribute to the growing financialization
of real estate assets. This could lead to speculation and create new forms of inequality, where
smaller investors are at a disadvantage compared to wealthier participants. As tokenized assets
become more liquid and easily tradable, the market could shift towards a speculative focus,
detaching from the actual value of the real estate and concentrating wealth in the hands of a few.
This poses a challenge to the idea of democratization and raises questions about the long-term
sustainability of tokenized real estate markets. The promise of blockchain technology must
therefore be balanced with appropriate regulations to protect smaller investors from the risks of
heightened financialization.

Mistrangelo et al. (2022) and Mistrangelo et al. (2023) both explore how blockchain and
tokenization can foster financial inclusion through fractional ownership. Their studies argue that
by allowing individuals to invest in fractions of properties, tokenization can create new
opportunities for individuals from diverse financial backgrounds. This is especially significant in
regions or markets where high property prices make it difficult for smaller investors to participate
in traditional real estate investments. Furthermore, tokenization and smart contracts could
streamline real estate transactions, providing liquidity to both buyers and sellers, thus creating a
more efficient market. While the democratizing potential is clear, these studies also note the
importance of aligning blockchain innovations with social sustainability goals. Tokenization
should be implemented in a way that not only increases liquidity but also supports vulnerable
populations, enabling broader access to the wealth-generating potential of real estate.
 Table 3. Key Theme by Publications

Source: Authors' compilation

4.0 Discussion

This section addresses the research questions posed in this study, starting with a detailed
exploration of the current trends and focus areas in real estate tokenization. By analyzing the
literature, we aim to highlight key findings and gaps, offering insights into the evolving landscape
of blockchain-based tokenization in the real estate sector. Through a systematic review of existing
studies, we will identify the benefits and challenges, as well as the opportunities for future research,
thus providing a clear understanding of the state of real estate tokenization today and where it
might be headed.

What are the key trends and focus areas in the existing literature on real estate tokenization?

The literature on real estate tokenization has evolved significantly since 2020, showing a clear
trajectory from foundational studies to more focused empirical research. Early studies, such as
those by Garcia-Teruel (2020) and Gupta et al. (2020), laid the groundwork by exploring the legal
challenges and practical benefits of blockchain technology in real estate. These foundational
studies highlighted the role of smart contracts in reducing intermediaries in cross-border
transactions, while also emphasizing tokenization's ability to improve liquidity through fractional
ownership. By 2021, studies like Garcia-Teruel & Simón-Moreno (2021) and Baum (2021)
expanded on these themes by analyzing the legal complexities and the democratizing potential of
tokenization, particularly focusing on how fractional ownership could broaden access to real estate
investment. This phase of research set the stage for further exploration of tokenization's benefits,
particularly its ability to improve market liquidity and reduce transaction costs.

By 2022 and 2023, the focus shifted towards practical applications and the social
implications of tokenization. Chow & Tan (2022) and Saari et al. (2022) examined how blockchain
was being incrementally adopted in real estate, particularly in regions like Asia-Pacific, where the
technology added efficiency to transactions without completely overhauling existing systems. The
role of non-fungible tokens (NFTs) also became more prominent, as shown by Serrano (2022) and
Fujimoto & Omote (2022), who explored how NFTs and security tokens could enhance
transparency and ownership verification. Empirical studies, such as Swinkels (2023), provided
data on the liquidity and ownership dynamics of tokenized real estate, reflecting how these
technologies were influencing investor behaviors. This growing body of literature, complemented
by studies like Baptista et al. (2023) and Crandall (2023), underscores the broader societal
implications of tokenization, particularly its potential for democratizing access to real estate
investments and promoting financial inclusion. In 2024, the literature focused on the integration
of blockchain with emerging technologies such as artificial intelligence (AI) and big data. Studies
like Mohd Yusof et al. (2024) proposed innovative frameworks for combining these technologies
to create more sustainable and accessible homeownership models. Mottaghi et al. (2024) provided
a comprehensive review of tokenization’s current state and projected future potential, particularly
addressing challenges like regulatory compliance and scalability. By this stage, the focus had
shifted to refining blockchain's role in real estate and addressing the remaining barriers to
widespread adoption.
 Figure 7. Literature Evolution

Source: Authors' compilation

What are the perceived advantages and challenges of real estate tokenization according to
existing studies?

Real estate tokenization offers several significant advantages, primarily centered around
streamlining transactions and improving transparency. By using blockchain and smart contracts,
tokenization reduces the need for intermediaries such as brokers, notaries, and other agents, which
in turn lowers transaction costs and enhances efficiency (Gupta et al. 2020, Joshi & Choudhury
2022). Additionally, tokenization automates processes, allowing for faster cross-border
transactions that are transparent and traceable. This enhanced level of automation minimizes
delays, reduces costs, and provides a secure way to execute real estate transactions, particularly in
markets where cross-border operations can be complex and time-consuming. The transparency of
blockchain ensures that all participants can track the progress and legitimacy of transactions, which
adds another layer of trust to the process.

Another major benefit of real estate tokenization is its ability to democratize access to real
estate markets. Tokenization enables fractional ownership, allowing smaller investors to
participate in an asset class traditionally dominated by large institutions (Baum 2021, Serrano
2022). Through fractional ownership, individuals can invest smaller amounts in properties,
lowering the barrier to entry and broadening market access. Furthermore, tokenization increases
liquidity in the real estate market by allowing these tokens to be traded on secondary markets
(Swinkels 2023). This not only enables easier buying and selling of real estate assets but also offers
greater flexibility for investors, as they can quickly adjust their investment portfolios without the
lengthy processes associated with traditional real estate transactions.

Despite its advantages, real estate tokenization faces significant challenges, particularly
around regulatory and legal frameworks. One of the primary issues is the lack of clear legal
guidelines for tokenized real estate transactions, making the use of smart contracts complex and
uncertain (Garcia-Teruel & Simón-Moreno 2021, Avci & Erzurumlu 2023). Many jurisdictions
have yet to align their real estate laws with blockchain technology, creating compliance hurdles
for developers and investors (Henker et al. 2023, Chao et al. 2022). Additionally, scalability poses
another major challenge. As the volume of transactions grows, managing high transaction
throughput while maintaining legal compliance and security requires sophisticated digital
infrastructure (Henker et al. 2023, Chao et al. 2022). This emphasizes the need for further
technological and regulatory development to support the widespread adoption of real estate
tokenization.
 Figure 8. Advantages & Challenges

Source: Authors' compilation

What are the unresolved issues and unexplored opportunities for future research on real
estate tokenization?

The field of real estate tokenization presents several unresolved issues and unexplored
opportunities for future research, particularly in the integration of blockchain with traditional
property systems. García-Teruel and Simón-Moreno (2021) suggest that further research is needed
on integrating blockchain technology with land registries to create decentralized systems for
managing property rights. This approach could streamline processes, but challenges remain in
cross-referencing ownership tokens with limited property rights, and the legal viability of
tokenizing specific property rights, like usufructs, which vary significantly across countries. These
areas remain largely unexplored and are critical for creating a seamless digital property market.

Another key area for research lies in assessing the broader impact of blockchain on the real
estate sector. Saari, Vimpari, and Junnila (2022) point out the need to evaluate the sector-wide
effects of blockchain applications that are already in production. This includes assessing the
economic viability of these systems and understanding the enablers and barriers to blockchain
adoption, such as regulatory frameworks and power shifts. Investigating these aspects is crucial to
understanding how blockchain technology can scale within the real estate sector and how it can be
aligned with public benefits and cost efficiencies compared to traditional methods.

Gupta et al. (2020) and Baum (2021) highlight the untapped potential of tokenization
structures. Gupta et al. propose replacing Special Purpose Vehicles (SPVs) with Decentralized
Autonomous Organizations (DAOs) to enhance decentralization and reduce intermediaries in real
estate tokenization. Moreover, exploring additional features for token holders, such as voting rights
and loyalty rewards, could add value to tokenized real estate systems. Baum (2021) identifies a
need to examine the demand for fractional ownership, particularly in single real estate assets, and
to explore opportunities for tokenizing large, high-profile assets and social impact projects, areas
that have seen limited empirical exploration.

Finally, technological and financial considerations present further research avenues.

Swinkels (2023) emphasizes the importance of understanding the effects of financial regulations
on tokenized assets across jurisdictions, while also examining how decentralized finance (DeFi)
solutions can reduce transaction costs. The governance of tokenized properties is another critical
area, as fragmented ownership could create inefficiencies. Chow and Tan (2022) suggest that the
APAC region needs a centralized secondary market for security token offerings (STOs) to improve
liquidity and explore how central bank digital currencies (CBDCs) could further reduce costs.
These technological and regulatory factors are essential to unlocking the full potential of real estate
tokenization.

Table 4. Potential Future Research

Author (Year) Title Potential Future Research

García-Teruel & The Digital Blockchain and Land Registries: Research should explore the
Simón-Moreno Tokenization of integration of blockchain with land registries to develop
(2021) Property Rights decentralized systems for managing property rights.

Tokenization of Usufruct Rights: Further studies should assess the

legal viability of tokenizing usufruct rights in various countries,
especially those with different legal restrictions.

Cross-referencing Ownership and Limited Property Rights: Future

research should focus on enabling blockchain systems to cross-
reference ownership tokens with limited property rights tokens to
ensure third-party protection.
Saari, Vimpari, & Blockchain in Real Sector-level Impact: Research should assess the sector-wide impacts
Junnila (2022) Estate: Recent of blockchain applications that have moved into production to
Developments and understand how they affect the real estate sector.
Empirical
Applications Economic Viability: Future studies should investigate the economic
viability of blockchain applications within the real estate sector,
focusing on public benefits and costs compared to traditional
systems.

Enablers and Barriers to Adoption: Research should continue to

explore the enablers and barriers to blockchain adoption, as well as
the power shifts and policy roles in scaling these applications.
Gupta et al. (2020) Tokenization of Decentralized Autonomous Organization (DAO): Future research
Real Estate Using should focus on replacing the Special Purpose Vehicle with a
Blockchain Decentralized Autonomous Organization (DAO) to further enhance
Technology decentralization in real estate tokenization.

Additional Features for Token Holders: Studies should explore

implementing features such as voting rights and loyalty rewards for
token holders within real estate tokenization systems.

Token Representation of Multiple Assets: Research should

investigate structuring tokens to represent ownership of multiple
assets within the same class, rather than just a single asset.
 Baum (2021) Tokenization— Demand for Fractional Ownership: Future research should examine
The Future of Real the demand for fractional ownership of single real estate assets to
Estate Investment determine the viability of tokenization in real estate investment.

Tokenization in Real Estate Funds: Studies should focus on

tokenization in real estate funds and debt markets, where
intermediate structures already exist, offering immediate
opportunities.

Potential for Tokenization of Landmark and Social Impact Assets:

Future research should investigate the tokenization of large, high-
profile assets (e.g., landmark buildings) and social
impact/community assets.
Swinkels (2023) Empirical Effects of Financial Regulations on Tokenized Assets: Future
Evidence on the research should examine how financial regulations impact the
Ownership and attractiveness of tokenized real estate assets, comparing results
Liquidity of Real across different jurisdictions.
Estate Tokens
Decentralized Finance (DeFi) and Transaction Costs: Studies should
explore how the evolving DeFi ecosystem could help address the
high transaction costs associated with tokenized real estate,
particularly during periods of increased gas fees.

Governance of Tokenized Properties: Research is needed to assess

whether current governance systems for tokenized properties can be
improved to address potential inefficiencies from fragmented
ownership.

Refined Estimates of Tokenized Property Values: Future research

should focus on improving estimates of tokenized property values to
better align token prices with the actual economic value of
underlying assets.
Chow & Tan (2022) Is Tokenization of Secondary Market for Security Token Offerings (STOs): Research
Real Estate Ready should focus on developing a centralized secondary market for
for Lift Off in security token offerings (STOs) in the APAC region to address
APAC? liquidity issues.

Integration with Cryptocurrencies and Smart Contracts: Future

studies should explore how real estate token transactions can be
executed using cryptocurrencies and smart contracts, reducing
transaction and administrative costs.

Role of Central Bank Digital Currencies (CBDCs): Further research

should investigate how the development and adoption of central
bank digital currencies (CBDCs) in the APAC region could lower
transaction costs in real estate tokenization.

Source: Authors' compilation

5.0 Conclusion

This systematic literature review on real estate tokenization highlights fragmented insights across
the technical, regulatory, and financial aspects, emphasizing the need for a comprehensive
consolidation of existing knowledge. Tokenization has gained attention for its potential to
revolutionize real estate by reducing intermediaries, increasing transparency, and democratizing
access through fractional ownership. However, existing studies remain disjointed, exploring
tokenization from different angles without fully integrating these perspectives. For example,
research has delved into technological challenges (Gupta et al., 2020; Joshi & Choudhury, 2022),
legal frameworks (Garcia-Teruel & Simón-Moreno, 2021), and the financial benefits of increased
liquidity and fractional ownership (Baum, 2021; Swinkels, 2023). Despite this growing body of
literature, critical gaps persist, particularly in understanding how these elements—technology, law,
and finance—interrelate. This systematic review addresses three core research questions: (i) what
are the key trends in real estate tokenization research?; (ii) what are the perceived advantages and
challenges according to existing studies?; and (iii) what unresolved issues and unexplored
opportunities exist for future research? By consolidating the findings from diverse studies, this
review aims to present a holistic view of the current state of real estate tokenization and identify
areas that require further exploration.

The findings suggest that real estate tokenization offers several significant advantages,
especially in streamlining transactions and enhancing transparency. Blockchain technology and
smart contracts can reduce the need for intermediaries such as brokers, notaries, and real estate
agents, leading to lower transaction costs and improved efficiency (Gupta et al., 2020; Joshi &
Choudhury, 2022). Additionally, tokenization enables automation in cross-border real estate
transactions, further reducing delays and costs. The transparency provided by blockchain ensures
that all parties involved can verify the legitimacy of transactions in real time, reducing fraud and
increasing trust in the system (Serrano, 2022; Saari et al., 2022). Furthermore, tokenization
democratizes real estate investment through fractional ownership, allowing smaller investors to
participate in a traditionally high-barrier market (Baum, 2021; Swinkels, 2023). Increased
liquidity, as a result of fractional ownership and the ability to trade tokens on secondary markets,
makes real estate assets more accessible and marketable. These benefits align with the growing
trend of using blockchain to enhance both financial inclusion and the fluidity of traditionally
illiquid markets.

Despite the advantages, real estate tokenization faces considerable challenges, particularly
in regulatory and legal domains. A key issue is the lack of clear legal frameworks to support the
use of blockchain and tokenization in real estate transactions. Legal uncertainties surrounding the
status of digital tokens and smart contracts complicate their integration into traditional property
systems (Garcia-Teruel & Simón-Moreno, 2021; Avci & Erzurumlu, 2023). Many jurisdictions
have yet to update their real estate laws to accommodate blockchain technology, which creates a
compliance gap for developers and investors (Henker et al., 2023; Chao et al., 2022). Regulatory
bodies must address these gaps to provide a legal basis for tokenized assets, ensuring that property
rights are protected in decentralized environments. Moreover, managing high transaction volumes
while ensuring legal compliance requires a sophisticated digital infrastructure. Blockchain systems
must scale effectively to handle the complexity and volume of real estate transactions, especially
in global markets where cross-border operations are common (Henker et al., 2023; Chao et al.,
2022). Without resolving these legal and scalability challenges, the widespread adoption of real
estate tokenization remains constrained.

Looking ahead, there are several unresolved issues and unexplored opportunities that future
research on real estate tokenization should address. First, more research is needed to integrate
blockchain technology with traditional systems like land registries. Studies such as Garcia-Teruel
and Simón-Moreno (2021) have highlighted the need for a decentralized system that could
streamline property rights management while ensuring the legal validity of tokenized assets.
Additionally, future research should explore the potential for replacing Special Purpose Vehicles
(SPVs) with Decentralized Autonomous Organizations (DAOs), which could reduce
intermediaries and enhance decentralization in real estate tokenization (Gupta et al., 2020). The
development of central secondary markets for tokenized assets, particularly in regions like Asia-
Pacific, also represents a promising area for research (Chow & Tan, 2022). Furthermore,
addressing the scalability challenges of blockchain in real estate will require further technological
innovation, such as improving smart contract functionality and ensuring that blockchain systems
can handle large transaction volumes without compromising security. By addressing these critical
gaps, future research can help unlock the full potential of real estate tokenization, transforming the
industry into a more inclusive, efficient, and transparent marketplace.

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