The Ultimate Guide to Metaverse Virtual Real Estate in 2024

While it’s slowly gaining traction, the metaverse real estate market is still relatively new and investing in it entails a fair amount of risk. However, due to its potential for high returns, it may be worth the leap. If you’re considering getting your share of metaverse properties before it’s too late, like with any investments, make due diligence your priority.

In this guide, we walk you through the metaverse real estate landscape basics. Learn what it is, how it works, the risks and challenges involved, and how to make it a lucrative investment.

What Is Metaverse Real Estate?

Metaverse real estate are parcels of land in virtual worlds. In the simplest sense, they are pixels. However, they are more than just digital images. They are programmable spaces in virtual reality platforms where people can socialize, play games, sell Non-fungible tokens (NFTs), attend meetings, go to virtual concerts, and do countless other virtual activities.

Source: sandbox.game

Both conventional real estate and metaverse properties can be sold, bought, and leased. However, they have a few notable differences beyond that: 

1. Tangibility. Classic real estate exists in the real world and can be visited in person, while metaverse parcels only exist in the virtual world.
2. Mode of payment. While metaverse properties cost real-world money, buyers can only purchase them through specific cryptocurrencies in their digital wallets. Depending on where the properties are located, they will require specific kinds of tokens during the sale. Physical real estate is bought in cash, cheque, wire transfers, or through bank loans.
3. Ease of sale. Metaverse land purchases are very straightforward, while physical real estate transactions are long-winded and complex—although typically more secure than metaverse purchases. 
4. Value. Properties in the metaverse are blockchain-based, making their value highly volatile and speculative. Physical property value, on the other hand, is more stable, due to records or titles dating back decades, or even hundreds of years in some cases. 
5. Taxation. Since they exist in the virtual world and do not have an actual geographical location, they are outside the jurisdiction of any government, and therefore not subject to laws or taxes. Physical real estate, on the other hand, is subject to taxation and is covered by government rules and regulations.

With the rise of the metaverse, digital real estate is expected to grow and expand as well. In fact, there has been a metaverse real estate boom in the last quarter of 2021 after Facebook changed its name to META and indicated a focused interest in the metaverse. As its popularity continues to grow, the value of metaverse real estate is forecasted to have a CAGR of 31.2% from 2022 to 2028.

Why Purchase Metaverse Real Estate?

Surprisingly, there is a lot you can do with (and in) metaverse properties. While they mainly give users a “physical” place to socialize and play games online, it doesn’t end there. Creators can monetize their digitized land by charging for access to their property or trading their NFTs. Brands can utilize their virtual properties to host virtual product launches, advertise services, and provide unique customer experiences overall.

On the other hand, real estate investors can make their virtual properties as lucrative as real-life properties. Just as tangible properties can be flipped or leased, metaverse real estate can be developed and rented. However, unlike physical properties, these digital assets are safe from physical depreciation. Given their virtual nature, the possibilities for their future development are practically limitless.

How Much is Metaverse Real Estate Worth?

When Decentraland held its first LAND auction at the Terraform Event in December 2017, a parcel of land cost a mere $20. Those parcels sold for an average of over $6,000 in 2021.

Source: nonfungible.com

With the positive outlook on metaverse growth, companies have been heavily investing in virtual land properties. In October 2021, Tokens.com, a blockchain technology company, acquired 50% of virtual real estate company Metaverse Group for $1.7 million. In November, the Republic Realm broke records when it purchased a property in The Sandbox for a whopping price of $4.3 million.

During its peak in 2022, the increased interest in metaverse real estate has bumped the prices to almost unbelievable heights. Digital land sells from $6,000 to $100,000, but some are reportedly being sold for even much higher. One of the biggest sales the past year is a property adjacent to Snoop Dogg’s in The Sandbox. An anonymous buyer purportedly bought it for $450,000.

Recent Metaverse Real Estate Market Prices

However, recently, metaverse land prices have taken a hit. In 2024, average floor prices of metaverse real estate plummeted -72% from their former highs. Now, average floor prices have decreased drastically and are down - 55% since 2022 and - 34% since 2023. 

This year, we have witnessed a steep decline in floor prices. For instance, Sandbox properties dropped—95% from a 2.86 ETH average in 2021 to only 0.13 ETH in 2024. Decentraland, too, has suffered a massive price drop of -89%, from a 1.73 ETH average in 2022 to a 0.18 ETH average in 2024. These jumps show how volatile the metaverse real estate prices can be.

What Factors Determine the Value of a Metaverse Property?

Metaverse real estate prices are in constant flux, making it challenging to give current numbers. However, we can identify the factors influencing the market prices for metaverse properties and give you an idea of what to look for to get the most competitive prices. 

1. Platform.

In real-world properties, houses in key cities are costlier than similar properties in lesser towns. Similarly, virtual land in prime locations—like prominent platforms—would be pricier than real estate in budding and less-renowned platforms.

2. Position within the metaverse. 

Expect higher prices for virtual plots in popular neighborhoods or near renowned landmarks, popular attractions, and properties owned by famous people. In the same way, land with better views and those adjacent to central hubs or frequented pathways naturally have steeper rates.

3. Land attributes and size. 

Plots with unique features and enhancements for a better user experience are more expensive than similar ones without. Land size also plays a role; generally, larger properties are more expensive than smaller plots within the same neighborhood.

4. Scarcity and liquidity.

Spaces in more crowded areas will cost more due to the scarcity element in the given neighborhood. Also, while new plots can be created within platforms, the land only becomes valuable when there is a market for it (liquidity). 

5. Market movement.

As markets are governed by supply and demand, metaverse real estate prices also fluctuate with these market forces. As the metaverse garners more interest (as it did during its peak), we can expect a surge in prices. Conversely, as the buzz around it mellows, so do property costs.

6. Past sales.

Digital land value prices may also follow historical, high-profile sales. Significant purchases in an area tend to inflate land values around them. Past sales in a neighborhood often help buyers predict their possible ROI for properties they’re eyeing. 

How to Buy a Metaverse Property

Purchasing a metaverse property works pretty much the same way as buying an NFT. Your deed of ownership is a unique piece of code on a blockchain. This code certifies your ownership or rights over that piece of digital land.

To start your metaverse real estate portfolio, you’ll need to have your own digital crypto wallet. Some platforms use specific cryptocurrencies for their transactions, so you might want to check them out before signing up for a new wallet. Then, head to the virtual metaverse platform and sign up to create an account. You’ll need to link your digital wallet to the platform to buy land and other assets. Choose a parcel of land and purchase it.

Like real-world properties, you can also purchase metaverse land through brokers and property managers. Unlike in the real world though, metaverse brokers don’t need licenses and are under no regulations—so make sure you transact with reliable ones.

Steps to Buying a Metaverse Property:

1. Create a crypto wallet on a platform capable of storing NFTs (ex. Binance or Metamask)
2. Buy cryptocurrency like Ethereum (ETH) for Voxels or Sandbox land purchases
3. Create an account on the platform you’d like to purchase land from
4. Link your wallet to the metaverse
5. Look for land either on Metaverse platforms or online marketplaces like Opensea.io
6. Purchase a property by either bidding on the property or buying it at the listing price

Tips for Getting Started in the Metaverse

If you are a beginner interested in investing in metaverse land, here are a few things to consider before diving in:

1. Explore the metaverse platforms. Each metaverse platform offers a unique user experience. For instance, Somnium Space is made for VR users, while Sandbox is tailored for gamers. Familiarize yourself with the platforms and see if you can make use of the land in the future. In most cases, you can create free accounts on various metaverses and virtually survey the land first before deciding to purchase.
2. Consider the plot location. Like physical real estate, metaverse plots fluctuate in value over time. If you want virtual land to double as an investment, look for properties in prime locations.
3. Observe the cryptocurrency movement. The value of virtual properties is tied to cryptocurrencies like Ethereum (ETH) and The Sandbox (SAND). Since these digital currencies are constantly fluctuating, it is worth timing your land purchases for when they’re on a downward trend.
4. Invest conservatively. Despite the hype, metaverse value is based on speculation, hence the volatility. While there is a chance to earn money from your land in the future, there is also the risk of losing it all.

Strategies for Maximizing Returns

Like physical real estate and traditional investments, metaverse properties can become lucrative assets with the right strategy. Here are a few ways to maximize your returns with your digital land:

1. Develop your virtual land. You can create income-generating properties on your digital land, such as stunning virtual residences that can be put up for sale, shopping malls where buyers can purchase services or goods, or interactive event places for concerts, meetings, or tournaments. 
2. Lease your land. Apart from developing your space, you can rent it out for others to use. 
3. Buy and sell. Like physical properties, the value of virtual lands fluctuates in time, often depending on blockchain movement or updates in the metaverse. Other owners purchase digital properties to resell them once the value goes up.

Where to Buy Metaverse Real Estate?

The majority of metaverse real estate is owned by the Big Four. These are the major players in the metaverse economy and include Decentraland, Sandbox, Somnium Space, and Cryptovoxels. These platforms own a total of 268,645 parcels, which are among the highest-priced ones on the market.

1. Sandbox

Sandbox currently dominates the metaverse real estate, owning approximately 62% of the entire market. LAND here has an average floor price of 0.13 ETH or around $2,500, dropping 95% from its peak average of 2.86 ETH or $6,700 in 2021. You can buy or rent virtual spaces for various uses. There are family homes, commercial spaces, art galleries, and hangout spots of different sizes.

In this UGC-voxel platform, everything is built by the community for the community. Sandbox players and creators buy, sell, and trade voxel creations. They buy LAND and build experiences on them. They can also monetize these experiences using NFTs and SAND, the utility token of Sandbox. 

In the past few years, the Sandbox has forged strategic partnerships with game companies like Atari, investors like Square Enix, brands like Shaun the Sheep, and celebrities like Snoop Dogg. These partnerships have given it more appeal both as a creative space and as an investment platform.

What’s New in the Sandbox?

We're thrilled to announce our partnership with @sscnapoli! 🤝⚽

The legendary Italian football club is bringing the heat to our metaverse with their first-ever pop-up store! 🔥

Learn more 👇https://t.co/cwCDYbLi0j

🎮 Dive into FOUR different #UGC experiences
🏟️ Win match… pic.twitter.com/ZEYtP2P8oh

— The Sandbox (@TheSandboxGame) August 13, 2024

Recently, The Sandbox has kicked off its partnership with the legendary Italian football club, SSC Napoli, by opening four pop-up shops across four user-generated content (UGC) experiences. There, individuals can interact with the virtual football club, connect with other Napoli fans, and meet their favorite players in any of these UGCs:

• Sports Land
• The Bank Job
• Temple Escape
• The Legend of the Miners

Source: sandboxgame.medium.com

The Sandbox has also launched an update that enables its users to buy and sell LAND in The Sandbox Marketplace. Previously, real estate transactions were hosted on a third-party marketplace (OpenSea). With this simplified process, users can list and buy LANDs hassle-free.

2. Decentraland

Decentraland is a 3D VR platform built on the Ethereum blockchain. Ownership of land parcels is given through LAND NFTs with the specific coordinates on the grid and a reference to parcel details. To purchase LAND, users must have MANA tokens, which are also used to purchase in-world products and services.

The virtual world of Decentraland is clustered into districts with each one having a unique type of content. Users can traverse these areas to interact, view, and share content. For creators and brands, these districts give them more targeted traffic that enables them to bring their content to specific audiences.

What’s New in Decentraland?

As announced in their 2024 Manifesto, the primary objective of Decentraland this year is to launch the next generation of the Decentraland Client. This advanced desktop client aims to fulfill their vision of a "performant and immersive virtual social world." This means that the new Decentraland Client will be future-proof and adaptive to alternative platforms (VR and mobile) while maintaining its purpose as a platform for high-quality creator tools.

In the second quarter of 2024, Decentraland finally rolled out its new client’s alpha version at the Community Summit. Here are some of the new features to expect:

• High performance
• Improvements in chat, in-world interactions, controls and cursor lock, and camera and drone view
• New locomotion system, roads and skybox (and two suns), and PBR-ready avatar shader
• Enhanced SDK-ready loading screens
• Backpack
• Broad distance radius, rendering scenes (LODs) in the distance
• Procedural landscape in empty parcels
• Real-time interpolation in players

Besides the new client updates, Decentraland also launched updates to their creator tools and the overall Decentraland ecosystem. These included enhancements on wearable and emote creators, builders, worlds, and many more. See the detailed updates here. 

3. Voxels (Formerly Cryptovoxels)

If you’ve been playing Minecraft, you’d feel at home at Voxels. In this virtual world, you buy land and build on it using monochrome blocks. Customize your designs by adding colors and other elements you can purchase with native $COLR tokens. The platform also has built-in tools for editing, creating avatars, and chatting.

Creators and brands can purchase digitized land to build galleries and stores that showcase their curated collections, products, or services. A parcel of land at Voxels currently has a floor price of 0.058 ETH or about $137, although some properties go as high as 100 ETH or around $237,000 depending on the size and location of the property. Like other virtual worlds on the Ethereum blockchain, land ownership is permanently recorded on the blockchain. 

What’s New in Voxels?

After four years of opening its doors to users, Cryptovoxels has adopted Voxels as its new name. According to experts, this rebrand gave more mass appeal instead of sounding exclusive to the crypto-savvy community.

True to the nature of their name change, Voxels is by far the easiest virtual world to visit and explore—even if you’re not a landowner and even without an account. To date, Voxels remains the most accessible and user-friendly metaverse. However, instead of just increasing its appeal to the masses, Voxels announced its goal is to create a space where users can truly support one another.

One of the most significant updates in the Voxels metaverse since its inception is their official land cap. Parcels of land in Voxels are capped at 69,420. There are 8,535 parcels minted since 2018, with the company currently minting at a rate of 115 parcels per month. According to Voxels, the land cap would be reached by 2068.

A recent post on X by founder Ben Nolan announced that for the rest of the year, he will be working on Voxels Next, a new web3 platform that will mirror the classic Voxels site. Since this is the case, user parcels and the wearables on the classic will also be present in Next, and all the users can build on both. 

According to Nolan, the priority in building Next is “doing everything properly” to prevent “weird code” issues in the current Voxels world that make the code difficult to build upon. Nolan also stressed that mobile improvements are also part of the Next updates and that users can expect a smooth mobile experience with the new world in the future. You can find more information about Next here.

4. Somnium

Somnium Space is a blockchain virtual reality metaverse built entirely by the players themselves. The 3D virtual world gives users immersive VR experiences that can be accessed on desktops and mobile devices.

The virtual space is divided into parcels of three different sizes: small, medium, and extra-large. You can choose from waterfront or roadside properties to build your own space. You can import objects such as avatars and monetize your digital assets.

Land parcels and in-game assets in Somnium are tokenized. Ownership is authenticated and recorded on Ethereum and Solana blockchain. Parcels in Somnium Space sell for a median price of $11,500. The most expensive lot was sold for $43,100 in February 2022. Those interested in purchasing parcels but with limited funds can still grab smaller parcels sold at around $2,000 to $4,000.

Aside from the Big Four, there are now more than a dozen platforms selling metaverse lands. Other alternatives include Axie Infinity, Star Atlas, Bit Country, and Aavegotchi.

What’s New in Somnium Space?

Somnium is set to release its highly anticipated update of its metaverse this Q4 2024. The latest version, Somnium Space 3.0, is reported to include “transformative revolutions” instead of only simple updates to the virtual world. The company is confident that these major upgrades may be a game-changer not only to the Somnium metaverse but to the whole virtual reality landscape. According to the company, they have spent thousands of hours and doubled their manpower to make this newest version come to life. 

Here are some of the most significant changes implemented in Somnium 3.0:

1. Unity Update 

The massive world update includes an overhaul of the platform, beginning with its shift to Unity 2022.3 from Unity 2019.2.2. This means newer and better features for builders, like improved rendering for more immersive and realistic virtual worlds. Creators can also expect access to enhanced features like AI, artist tools, physics engines, and more. 

Besides the visuals, the Unity update offers optimizations like seamless gameplay, faster load times, and overall enhanced performance in Somnium VR worlds. Finally, the new Unity version allows compatibility with other VR systems like the Apple visionOS.

2. New Launcher

This virtual space’s launcher has also been given cool upgrades, including a new Worlds menu that gives an overview of the active base reality and world sessions. Social capabilities like making friends and chatting are also now available.

3. Base Reality World and Weather Updates.

Perhaps one of the most noticeable updates to the Somnium world is the optimization of its weather systems and Base Reality World. Besides making the world elements more lifelike and the weather patterns more realistic, this overhaul is in preparation for hosting hundreds to thousands of potential users in a world at a given time.

4. Decentralized Marketplace and Creator Royalties

Shifting to a decentralized model, this change—powered by CUBE and built on Polygon—will allow users to mint items and upload them to the Marketplace, the Base Reality World, or any user-generated World. Not only would the creators benefit from their item’s firsthand sale—Somnium grants a perpetual 5% royalty for the creator for each time their items are resold.

5. Full-Scale Scripting

Previously, scripting on Sominum was done through Bolt macros, in favor of users who have limited programming know-how. With the advent of version 3.0, the metaverse will now support full-scale scripting via Somnium Unity SDK, to create endless possibilities for customization within the realm. You can find all the updates to be rolled out in Somnium Space 3.0 here.

How to Choose Which Parcels of Land to Buy on the Metaverse

Just like properties in the real world, location plays a factor in choosing a virtual land in the metaverse. Parcels in The Sandbox and Decentraland continue to increase in value as big brands like Atari, Samsung, Miller Lite, and Adidas stake their claims in these virtual worlds. Many early buyers of lots adjacent to them or within the vicinity have raked in massive income from their investments.

If you plan on investing in metaverse real estate, look for areas that have the potential for development. Places where people can potentially congregate will be more valuable than those in nondescript areas. Consider plots of land near but not within developed districts. You can score these properties at relatively lower prices, build on them, and wait for prices to drive up.

Statistics on Metaverse Real Estate

Most statistics on metaverse real estate appear to be positive at the onset of the virtual reality worlds. They indicate massive gains for early “settlers” on the virtual platforms. However, after their peak in 2022, when prices and sales for virtual lands have skyrocketed exponentially, interest in them has mellowed, prompting the drop in land values across metaverses.

Despite the downturn of metaverse property values in the past few years, recent statistics indicate a more promising future due to its surprising popularity rise among the younger population. Here are some of the notable stats for 2024:

• Of the 600 million+ metaverse users in 2024, 80% are younger than 16.
• In 2022, the metaverse market was valued at $61.8 billion. According to experts, its value is projected to reach $824.53 billion by 2030.
• 54% of industry experts predict that by 2040, the metaverse will be a part of daily living by some 500 million users worldwide.
• 60% of gamers have joined the metaverse for shopping and socializing (and other non-gaming activities).
• Experts predict a yearly growth of 38% in the metaverse gaming market until 2027, while some $18 billion is expected to be invested in VR/AR gaming tech by the end of 2024.

Apart from interest in the gaming community, sectors like the Education and Computer/Information Tech sectors are slowly but aggressively investing in the metaverse. 

Risks and Challenges of Investing in the Metaverse

Although the metaverse is expected to grow tremendously in the next few years, it is still a relatively new industry that is far from stable. For one, if a metaverse platform goes offline permanently, all your land and assets in that platform become non-existent.

Then there’s also the issue of valuation. There’s always the question of how to assign value to a land whose scarcity is artificial and whose future value cannot be quantified. With their value dependent on highly volatile cryptocurrencies, metaverse land is susceptible to volatile conditions as well.

If you’re keen on investing in metaverse properties, the best time to invest is now while the market is still growing and demand is rising. However, if you’re still unsure, there are more conservative ways to invest in the metaverse, such as the following:

• ETFs. An exchange-traded fund tracks the movement of a specific sector. In the market, there are several ETFs focused on tech companies developing the metaverse. Examples include Augmented Reality ETF, AWKW (ARK Next Generation Internet) ETF, and VR (Global X Virtual Reality) ETF.
• Metaverse Companies. Another option is to directly purchase metaverse company shares in the stock market. Tech giants like Microsoft, Google, and Meta/Facebook are some of the metaverse companies actively involved in developing the virtual world.
• Investment Funds. Besides ETFs and directly investing in metaverse companies, it is also worth considering investment funds focused on companies operating within the metaverse, like the VR Vision Fund. 

Ethical and Legal Considerations

Currently, the Federal Trade Commission (FTC) is the regulating body that governs the metaverse, as it is responsible for upholding competition and marketing law on the internet. As for regulating conduct within the metaverse, this is where the terms of service (TOS) between users and developers of the metaverse platforms come in. 

However, despite these safeguards in place, there are several ethical and legal concerns surrounding the metaverse, with data privacy being the most glaring one. Platform operators will be able to use the data they accumulate from their users in whatever ways they have defined in the TOS, even for revenue. Sadly, while we have the FTC, it is limited in what it can do to regulate data use by platform operators—for now, at least. 

Here are a few other issues to keep in mind:

• Privacy and cybersecurity
• Copyright and intellectual property concerns
• Virtual asset protection
• Content regulation issues
• Emergence of potential scams and fraudulent platforms

How is the Metaverse Affecting the Real Estate Industry? 

Although the metaverse is still relatively young, we can see how it’s slowly revolutionizing the real estate industry. The metaverse is opening up new possibilities for commercial real estate, for instance, expanding the places where brands conduct business. Virtual real estate can be developed into offices, virtual storefronts, shopping centers, concert halls, and conference venues. 

The metaverse is also changing how real estate business is conducted, by making each user a potential buyer and seller at the same time. Unlike physical real estate where buyers had to look for agents to help them purchase properties, in the metaverse, there’s almost no need for intermediaries for successful property deals.

However, while this may seem disadvantageous for real estate agents, there is an opportunity to make the metaverse work for them. Agents and real estate companies can use the metaverse to recreate virtual counterparts of the physical properties they’re selling. Right now, there is news of various engineering and real estate companies investing in or developing technology to enhance a customer’s home-buying experience. Due to the convenience they pose, it’s only a matter of time before we see immersive virtual home tours replace—or at least augment—traditional open houses and in-person walkthroughs for property showcases. 

Big Risks with Potentially Big Rewards

Rife with uncertainties, investing in metaverse properties is highly speculative in nature rather than prospective. To say that the risks are big is an understatement—in the virtual world, you can lose all your investments in a blink. However, the rapid shift to full digitalization in almost all industries can also potentially reap big returns on metaverse real estate investments.

Before you make any investment decision, learn as much as you can about the metaverse. Understand all the risks and challenges and weigh them against the potential benefits. Only after you have thoroughly researched all the pros and cons should you make your decision.

About the Author

Geri Mileva

Writer

Geri Mileva, an experienced IP network engineer and distinguished writer at Influencer Marketing Hub, specializes in the realms of the Creator Economy, AI, blockchain, and the Metaverse. Her articles, featured in The Huffington Post, Ravishly, and various other respected newspapers and magazines, offer in-depth analysis and insights into these cutting-edge technology domains. Geri's technological background enriches her writing, providing a unique perspective that bridges complex technical concepts with accessible, engaging content for diverse audiences.