Collapsing transaction volume, falling house prices, sluggish buyer interest… The virtual real estate market on the Metaverse is experiencing a sharp downturn.
Unsurprisingly, the value of land and other real estate in the Metaverse has fallen sharply over the past few weeks, following the general trend in the cryptocurrency and NFT markets.
In November 2021, interest in real estate in the Metaverse peaked after Facebook was rebranded as Meta, which in the eyes of the market highlighted the strong commercial potential of this technology. Since then the tide has turned and it is the disenchantment that reigns among those who had invested in the metaverse and rushed to buy land on Decentraland or The Sandbox, hoping to be able to resell them most of the time.
Between November 2021 and June 2022, real estate transactions in the Metaverse on these two platforms fell by 97%, according to WeMeta data reported by The Information.
In numbers, $229 million worth of properties were sold in the Metaverse at the end of last year, compared to just $8 million at the start of the summer. Another comparison: 16,000 sales were completed in November, but no more than 2,000 in June… at a loss. Because the average price of land inevitably falls. It was $16,300 in February but had fallen to just $3,300 in June, down almost 80%.
This situation is not only due to the collapse of cryptocurrencies. It is indeed the general buzz surrounding the metaverse that has plummeted as many investors were eventually turned off by the lack of maturity of a market where everything needs to be built, starting with an audience that – even if it works – do it will take many years.
Of course, the near-widespread uncertainty about the real economy, which has intensified in recent months, hasn’t helped support virtual property sales in the Metaverse. And even if the potential is there, a growing number of companies doubt that investing in the Metaverse is a viable long-term strategy today, preferring to postpone their plans until later. It must be said that the braking stroke is very violent.