Property developer New World Development (NWD) on Wednesday announced the creation of Hong Kong’s first property-purchase blockchain platform, in collaboration with Hong Kong Applied Science and Technology Research Institute Company (ASTRI).
Bank of China (Hong Kong) (BOCHK) is the first bank to participate and apply the new platform to its services, according to a press release.
Integrating blockchain technology into a property-buying platform will help reduce the time and work between signing a provisional agreement and finalizing a deal.
The one-stop blockchain platform claims to be able to save up to 8 hours on a transaction by integrating all the time-consuming intermediary steps: the filling-in of long and complex application documents, the tedious back-and-forth between banks and lawyers, and the time-consuming research into information about mortgage loans.
Moreover, offering an all-in-one, 24/7 support service to buyers, banks, and related bodies, the platform benefits service providers and saves around 47 hours of work, and the entire industry chain will save around 55 hours in total, according to NWD.
The Hong Kong property developer plans to launch the platform in mid-April this year, applying it to new property and stock sales. With target sales of about 4,000 to 5,000 home units in two years, it expects most of the buyers will use the platform.
For now, it does not intend to open the platform to other property developers, but other banks, as well as related bodies, such as law firms, will join the platform this year.
According to the company, three to four banks have expressed interest in joining the platform.
After two years of development and an undisclosed amount of investment, the property purchase platform is said to leverage the blockchain technology, with its decentralization feature, in information encryption and transmission between related bodies.
NWD noted that the platform will not charge customers or service providers, as it aims to enhance the purchase experience of property buyers, and help the company and its partners to boost operational efficiency.
Under the current practice, after a property buyer signs the provisional sale and purchase agreement, it takes about two working days to get a formal contract ready to finalize the deal, with a lot of paperwork, paper document delivery and transfer involved. With the new platform, the company claims the provisional agreement will be encrypted and transferred to the law firm through the blockchain platform, saving the lead time to one hour.
In addition, property buyers can find mortgage proposals from multiple banks for comparison, and submit application instantly through the platform. The blockchain platform will send the purchaser’s authorized, digitally signed provisional agreement to the selected banks, saving buyers at least six hours of following up with the different banks, and thus dramatically shortening the time spent in the application process.
According to the company, information held on the blockchain platform exists as a database, shared by buyers, sellers, banks, and lawyers. As of now, developers, banks and related bodies each needed to input the buyers’ information and verify it manually and separately. But in the new system, buyers can authorize banks and related bodies, to access their encrypted information through the blockchain platform. The company claims that it can drastically reduce time and procedures, making the process far more efficient.
Asked whether the new platform will take over some of the duties of human sales agents, an executive at NWD said agents will be responsible for hosting and serving customers, and no change on duties should be expected.
“Traditionally, buyers, real estate developers, banks and law firms all work separately – until now, there has been no one-stop platform to connect all parties,” Adrian Cheng, executive vice-chairman and general manager of NWD, said the press statement.
The new PropTech (Property Technology) platform will “open up the entire real estate industry chain; it also marks the first implementation of blockchain technology into the real estate industry,” he added.
As the first bank to participate and apply the new platform to its services, Bank of China (Hong Kong) is not a newcomer in adopting blockchain technology in its business.
The bank had earlier partnered with ASTRI to introduce Hong Kong’s first blockchain-based mortgage approval system in 2016, for the purpose of evaluating property mortgage applications.
According to a report in June last year, BOCHK, which runs about 200 branches in the city, said it has been processing 85 percent of its mortgage-related real estate valuations with blockchain technology.
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