TECH savvy sellers are jumping on the cryptocurrency bandwagon by offering to accept digital currency as payment for their properties.
A search of national listings websites shows that, although in the minority, there are owners of properties – ranging from a potential $20m penthouse to a $105,000 miner’s cottage – who are prepared to accept bitcoin for their homes.
Are these people pioneers in what could soon become a mainstream way of transacting real estate, or are they just taking a gamble?
David Chung, the founding director of Creo, a legal firm for business start-ups that has a focus on cryptocurrencies, said property transactions involving digital currencies worked best when both buyers and sellers held cryptocurrency accounts.
“It would not be a smart move to sell real estate for, say, bitcoin and then sell your bitcoins for Australian dollars. The market is way too volatile.”
Mr Chung said despite transactions in digital currency becoming more common, it would not become commonplace until it was backed by government.
“I’ve read somewhere that something like 70 per cent of the central banks, including the Reserve Bank, are researching a central banking digital currency,” he said.
“It is likely that in five to ten years a lot of the major economies will issue their own digital currencies but will bring in regulation to support those currencies, which then should also apply to everything else, including property transactions.”
So what are the pros and cons?
At present the pros of accepting digital currency for the sale or part sale of your home include exposure to a wider buying market, faster transaction times, potential increased transaction security and the opportunity to diversify your portfolio.
The obvious con, like with any investment, is (high) financial risk. The amount you receive for your property will only be as good as the value of the nominated currency on the agreed day of exchange.
Yet there are those willing to take the gamble, including Olympic swimmer Cam McEvoy who has put his villa at 1/40 Via Roma on the Isle of Capri on the market.
McEvoy, 27, who went to the London and Rio Olympic Games, is offering to accept bitcoin for his pad, which he bought for $1.1m in 2016 and hopes to sell for around $1.5m, so he can build on his existing cryptocurrency shares.
Josh Longhitano of Lucent in Burleigh Heads, who is marketing the property alongside Ivan Sarakula, said accepting cryptocurrency opened the property up to a wider buying audience.
“Some people are asset rich, some are cash rich and some are bitcoin rich, but few are all three,” he said. “Someone may not have the cash to buy a property but they may heaps of bitcoin stored away. There is now an opportunity for them that wouldn’t have been there.
“For the younger generation it is the way of the future.”
You don’t have to be ridiculously rich to dabble in digital currency – in many cases you can start investing from as little as $5 to $10.
Yet whoever buys the Soul penthouse in Surfers Paradise, which is open to cryptocurrency payment, will need to have very deep pockets.
The apartment, owned by Sydney-based Michael Koloadin, has been touted as being worth up to $20m. Mr Koloadin, who sold his tech company in 2018 for $52m, said that despite cryptocurrency’s tendency to suffer large valuation swings, it was a risk that he was willing to take.
The property’s co-marketing agent Tolemy Stevens of Harcourts Coastal said one of the benefits of trading in cryptocurrency was that you could have the funds in your bank account within hours of doing a deal.
The property will go under the hammer in a private auction on Sunday at noon.
Bitcoin is also being accepted by the owner of a two-bedroom unit at 4/257 Shute Harbour Road, Airlie Beach. Located on the main street, the advertisement states that it is “a great buy for a savvy investor, with bitcoin accepted” – although a guide price has not been set.
You can also exchange digital coins for a 345sq m two-bedroom miner’s cottage at 77 Batchelor Street, Queenstown, Tasmania. The property, with no connected phone line, is being sold through its owner for $105,000.