With a dramatic rise in popularity over the last few years, Bitcoin has been making waves. Could 2019 be the year Queensland developers start accepting Bitcoin as payment for new homes?
By now, most people will have heard of Bitcoin. But establishing a working understanding of the way the cryptocurrency actually functions is a whole different ball game. While the phrase “decentralised digital currency” is thrown around like confetti, it’s rare to come across a genuine explanation in laymen’s terms of what Bitcoin actually is.
In its essence, Bitcoin is a currency that exists (and is transferred) exclusively via the internet. There are no banks, no centralisation and no conversion rates or sky-high fees. Since its emergence in 2009, Bitcoin has gone from a novelty internet product to a major player in global finance. In the last few years, the prevalence of Bitcoin has reached such a rate that many brick-and-mortar businesses have started to offer Bitcoin as a payment method, without the need to convert to Australian dollars.
Australia is ahead of the pack when it comes to accepting cryptocurrencies. Brisbane Airport is the first airport in the world to be recognised as “crypto-friendly”, accepting Bitcoin and several other cryptocurrencies. Private car sales have been taking place via Bitcoin trade for years and in 2017, a Victorian home valued at $2.5 million was sold via Bitcoin in a private sale, becoming the first property in Australia to be purchased with cryptocurrency. In the last year, the popularity of Bitcoin has ascended into the stratosphere, with prices continuing to rise and no imminent crash expected. But are we ready to accept Bitcoin as payment for new property in Brisbane? Are developers willing to play ball?
Brisbane-based developer Linzen is ready to rumble. Last year, Linzen became the first property developer in the state to offer full or partial Bitcoin payment for an off-the-plan townhouse. The development, Dakabin Crossing, is located in the fast-growing Moreton Bay Region, offering contemporary, architecturally designed townhouses of three or four bedrooms. This begs the question of whether or not accepting Bitcoin for off-the-plan property is set to become a wide-spread trend. An industry-wide leap into the future? The reality is, probably not. The very nature of Bitcoin means that it’s more unstable than any centralised currency. The market price of cryptocurrencies like Bitcoin can vary up to 20 percent within a single day, which can make a significant difference when talking about property. For developers, having a substantial chunk of their revenue caught up in Bitcoin is perhaps a risky move.
In December of 2017, the price of Bitcoin skyrocketed to an all-time high of $25,000. Yet, a year later the average price of a single Bitcoin in December of 2018 was just over $4,500. For buyers prone to lucky investment choices, Bitcoin could be a dream come true. The purchase of property with Bitcoin allows those who invested several years ago (back when a single Bitcoin was $8) an opportunity to offload significant gains into a real-world investment, or even their first home.
Regardless of the risks, there’s no denying Bitcoin is a significant part of the financial market, and as a result, the property market. The increased use in the mainstream market through companies like Linzen is what will drive cryptocurrencies forward until they’re as much a part of the market as any fiat currency.