How Will Decentraland Estate’s Effect Land Market Prices?
Posted On August 31, 2018
Decentraland have just released their estate feature and people can finally list bulk parcels!
The feature to list and transfer bulk parcels on the marketplace has been enabled but the ability to sell is yet to be finalized. It’s expected to be released in a few weeks.
In this blog post I wanted to quickly cover and explain the feature and also explore the potential effects this will have on the marketplace.
Listing your Decentraland Parcels as an Estate
To list you parcels as estates simply go to ‘My Land’, then click on any parcel that’s part of the estate. You should see a button at the bottom saying ‘create estate’.
Then you can simply select all adjacent parcels like I have done below.
If you’re listing more than 12 parcels you’ll get the below error.
Seems you can only list 12 at a time but once you’ve listed 12, you can go back, edit the parcel and add another 12.
So effectively it works out the same.
Estates just look like bigger parcels on the marketplace.
It’s actually quite hard to spot them and I’m hoping the devs at least slightly change the color so people can see them when scanning the marketplace.
This is a great step forward in increasing liquidity in the market and allowing new investors to find the parcel/land they want.
How Will Decentraland Estates effect the Marketplace?
It’s still early days. In fact, this feature just became available about 12 hours ago so people are still adjusting to how this will effect the marketplace.
There has been some discussion as to how this might effect the marketplace. It’s good to think about these things as it might lead to opportunities that others haven’t caught on to yet.
Removing Single Parcels from Supply
Thriving Marketplaces are all about supply and demand. The more supply there is, generally the cheaper the item.
Decentraland Marketplace is no different, with each parcel that is removed from the ‘for sale’ section of the marketplace, the value of parcels increase slightly.
For example, if the cheapest 5 parcels are,
And the cheapest 4 get bought and effectively removed from the marketplace, then the cheapest now is 8,500 MANA.
As this process continues and the bottom continues to increase, new investors or people that want more land will have no choice but to spend MORE than this.
With Decentraland Estates, as people are making estates out of their lands, they will be removing lands from the marketplace effectively removing some of the supply and/or competition for single parcels.
This should see an increase in land prices.
Estates give new Investors more Options
On the contrary, new investors might prefer multiple plots of lands as opposed to cheap singular parcels. If estates aren’t priced too wildly, (which I’m pretty sure they will be at least at the start), then there might be less demand for single parcels.
This might contend with the first point and we might see a bit of a pull from both sides as supply for single parcels decrease but demand also decreases due to their being a more desire to own estates.
The build and dimension benefits are quite large for adjacent parcels.
People don’t have to Break apart their Adjacent Parcels up to Sell
There’s a lot of people that have been wanting to sell their parcels for a while that are adjacent to each other.
Previously, they’ve had no choice but to sell these individually which breaks apart beautiful estates into weird multi-owned areas.
This doesn’t need to happen any more as people can simply sell them as bulk.
Decentraland have a limited amount of estates and with each one that breaks apart, it’s hard for new ones to form. As time goes on estates are going to become more and more rare.
Opportunity to sell for Smart Traders
I’m sure there will be a lot of people listing their estates for really expensive prices just because they are estates.
For example, 10 parcels that are really far from the centre might sell for 7,000 MANA a piece but when sold as an estate people might try sell them for 150,000+ MANA just because they’re estates.
We might see the same thing that happened when the marketplace first opened up, a lot of crazy valuations but we also might see some underpriced lands.
Somewhere in the middle there is space for sellers that want to cash out or flip their previous buys, (like me!), to price fairly and get their lands sold.
For example, my 21 parcel land in the north was bought for 140,000 MANA, I should be able to sell these for 190,000 MANA. That’s 9k MANA a piece which is slightly expensive if sold individually but might be worth it for a buyer if bought as an estate.
There is still a lot of data that needs to be collected to see if any of the above predictions come true. The next few months will be very interesting for Decentraland!