Chronicles of Metaverse: Real Estate in the Age of the Metaverse: Shifting Concepts of Value and Space

*Editor’s note: K-VIBE invites experts from various K-culture sectors to share their extraordinary discovery about the Korean culture.

By Noh Seok-joon (Master K-architect engineer)

While the metaverse may offer the promise of infinite digital space, not all virtual locations hold equal value. Just as real-world properties vary in worth based on factors like location, virtual real estate in the metaverse is subject to similar disparities.

Even if two homes are identical in size, design, and interior, their value can differ dramatically depending on whether they are located in Seoul’s affluent Gangnam district or in a remote countryside village. Likewise, in the metaverse, some areas command high value while others are considered less desirable.

To some, the notion of assigning prices to intangible plots of virtual land—ones that disappear with a logout or power-down—may seem far-fetched. However, in both real and virtual worlds, demand dictates value. If enough users seek out a certain digital location, its worth inevitably increases.

◇ Assessing Value in Virtual Real Estate

▲ This image of metaverse real eastate is screenshot from 101 Blockchains website. (PHOTO NOT FOR SALE) (Yonhap)

Virtual spaces within the metaverse function much like physical land in the real world. Popular areas with high user traffic naturally gain more value. Metaverse platforms often replicate real-world urban functions, though they exist as mirror worlds—digitally rendered versions of actual cities using augmented, virtual, or mixed reality technologies.

Yet, the way virtual cities are occupied and used can differ significantly from the physical world. In the metaverse, neighborhoods can evolve in unexpected ways: Harlem may become the hub of Manhattan, while Wall Street may turn into a digital "ghetto," depending on how traffic flows and user behavior shift. Usage patterns, rather than geographical logic, define value.

These preferred digital areas may emerge through corporate planning or develop organically through unforeseen trends. Whether in the physical or digital realm, spaces that foster active engagement within limited timeframes generate value.

Although virtual space is theoretically limitless, its actual activation and engagement levels vary. This discrepancy becomes a key metric for determining virtual property value. How a space is occupied and the nature of the content that drives traffic to it create distinct value maps within the metaverse.

For example, while the United States possesses vast land, only certain areas like New York, Chicago, and Los Angeles are highly developed and economically significant. Similarly, the metaverse sees concentrated development where users and businesses cluster.

This dynamic echoes the American frontier era, where empty plains evolved into bustling towns as settlers built homes, opened shops, and laid out infrastructure. In the metaverse, such development hinges on who establishes early influence and how much user traffic they attract, becoming central nodes within the network.

As users flock to these digital cities, economic activities follow. The value of each virtual property is shaped by when it was acquired, how long it is held, how it is used, and how much others desire it—mirroring real-world real estate dynamics.

High-value areas naturally become influential network nodes. These nodes continue to emerge and vanish, forming an ever-evolving, organic virtual ecosystem. Through this process, value becomes location-specific, and that value is actively traded by those who need it.

Platforms like The Sandbox, Decentraland, and Cryptovoxels have seen over US$500 million in virtual real estate transactions annually. Analysts project that by the end of this year, transactions could exceed US$1 billion, with annual growth reaching around 30 percent by 2028.

Currently, entertainment and business drive most of the demand in the metaverse, rather than education or residential needs. However, as metaverse environments become more advanced and diverse, virtual real estate with high utility is expected to rise in value.

◇ Implications for Real-World Real Estate

The growing influence of virtual real estate is expected to bring major changes to the physical property market. As metaverse-based transactions become more common, real-world demand—especially in certain sectors—could decline, leading to a potential drop in property prices.

One example is office space. If people begin writing reports, conducting meetings, and handling business in the metaverse, commuting to physical offices may become unnecessary. Companies like Meta and Kakao are already experimenting with hybrid work environments combining the virtual and the real.

Should such trends continue, the need for physical office space may diminish substantially. This shift could extend to other types of real estate as well. As technology reshapes user behavior, traditional properties may see declining usage rates, and consequently, a reduction in value.

In the U.S., the rise of e-commerce has already led to the downfall of retail giants like Sears and Macy’s, resulting in large-scale restructurings and plummeting real estate prices for their physical stores.

As tech-driven services such as e-commerce and the metaverse gain traction across industries, real estate markets may react more sensitively than expected. While offline retail may decline, new types of real estate demand could emerge in both the virtual and real worlds.

Virtual properties in high-traffic metaverse areas may also command significant premiums. Much like digital artworks that gain tremendous value as NFTs, virtual spaces that demonstrate uniqueness and popularity may achieve surprisingly high price tags.

The rapid growth of the cryptocurrency market further suggests that virtual real estate in the metaverse could generate significant and unexpected value.

◇ A New Role for Architects in the Metaverse

▲ This Yonhap file photo shows a branch of U.S. retail giant Sears. (Yonhap)

As the environment evolves, so too will the role of architects. In the traditional sense, architects are specialists who design and construct physical spaces. But in the future, a new generation of architects will emerge—those who design and shape digital environments within the metaverse.

These next-generation architects will operate across both physical and digital realms, creating entire ecosystems within virtual cities. They will become comprehensive space creators who not only design buildings but also craft immersive, organic urban environments within the metaverse.

To succeed, these digital architects must possess a unique combination of skills: deep knowledge of the humanities and history, vivid imagination, strong creativity, and fluency in digital technologies.

In the metaverse, architects may function like digital artists, creating one-of-a-kind, innovative space designs and minting them as NFTs. These virtual structures could then be replicated in the real world as physical buildings, preserving their rarity and design integrity.

Ultimately, such architectural innovations will play a key role in bridging the real and virtual worlds, offering users rich, multifaceted experiences in the emerging multi-reality era.