WHAT goes up must come down – including the hyper-inflated prices of metaverse real estate.
Following months of skyrocketing prices, it appears that the value of “land” in the virtual 3D space is taking a tumble.
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According to analytics company Meta Metrics, the average price of metaverse property dropped 18 per cent in March.
That’s in stark contrast to the preceding six months when prices rose nine-fold. Sales in January topped $85million.
The metaverse is a loosely defined virtual realm made up of connected 3D virtual worlds where people can work, play or do business.
Visitors to the social spaces can buy goods and services, such as property, much like they would in the real world.
And while that largely takes the form of a few square metres of space that fetch a small fee, prices can go into the millions.
Vast metaverse estates are fetching big prices as investors buy up land in the hopes of making a tidy sum.
Traded in cryptocurrencies, they are owned as NFTs. Much like with real property, owners splash out in the hopes they’ll be worth more in future.
However, just like their real-world counterparts, the value of the plots can go up or down. They are considered a risky investment.
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According to an analysis by Meta Metrics, a metaverse data provider, the average metaverse real estate price dropped to $8,594 in March.
That’s compared to an all-time high of $10,473 reached in the previous month.
However, despite the dip, things are still looking rosy for investors.
Land pricing was still four times higher in March than it was a year earlier when properties were going for $2,131 on average.
It’s unlikely that the blip will curb sales as interest in the industry grows.
Sales of virtual real estate topped $500million last year and could double this year, according to analysts and investors.
So far, metaverse real estate sales have been concentrated on the “Big Four” – Sandbox, Decentraland, Cryptovoxels and Somnium.
It’s likely that other sales booms will sweep the industry in future as new metaverses become the flavours of the week.
Prices for metaverse properties may be volatile but that hasn’t stopped investors from pumping money into them.
Republic Realms, a metaverse real estate company, splashed out $4.2milion on land in virtual world The Sandbox last year.
That topped a record set by Andrew Kiguel, the CEO of tech website Tokens.com, who dropped $2.4million on land in Decentraland.
At the time of these purchases, the price of digital real estate had skyrocketed by 400 to 500 per cent, Kiguel told CNBC.
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This post first appeared on Thesun.co.uk
