Over the past few issues, we’ve seen how Dubai is pioneering real estate tokenization. Properties are being divided into tokens, sold to investors around the world, and backed by government pilots.
But many readers ask the same question:
“If I buy these tokens, how do I sell them? Do I need to wait years until the property itself is sold?”
This question takes us to the next stage of tokenization: secondary markets.
What Are Secondary Markets?
Let’s keep it simple.
The primary market is where you buy something for the first time.
Example: You invest in a new villa project in Dubai by buying 10 tokens at $1,000 each.The secondary market is where you resell those tokens to someone else.
Example: A year later, you decide to sell 5 of your tokens to another investor from Singapore who wants exposure to Dubai real estate.
Think of it like this:
Buying directly from the developer = like buying a car from the showroom.
Selling to another person later = like selling that car second-hand.
The secondary market is the “second-hand market” — but digital, instant, and global.
Why Liquidity Is the Game-Changer
Right now, most fractional or tokenized real estate platforms are like a hotel with only an “entrance door.” You can go in (invest), but the “exit door” (selling your share) doesn’t exist yet.
Secondary markets open that exit door.
Here’s why that matters:
Flexibility: You don’t need to stay locked in for 5–10 years.
Emergency access: If you need money quickly, you can sell tokens instead of waiting for the property to be sold.
Global buyers: You’re not limited to your local market. Anyone, anywhere, could buy your tokens if the platform is open internationally.
Price discovery: Tokens can trade daily, giving you a clear idea of your property’s current market value.
How It Could Work in Practice
Imagine this scenario:
You buy 20 tokens in a tokenized Palm Jumeirah apartment at $500 each. Total investment: $10,000.
After two years, the Dubai property market rises, and similar apartments are selling at higher prices.
You decide to sell 10 tokens on the secondary market.
A buyer in London purchases them from you at $600 each.
You make $1,000 profit — without waiting for the entire apartment to be sold.
This is the future vision of tokenization with liquidity.
Why We Don’t Have This Yet
If it sounds too good to be true, here’s why we’re not fully there yet:
Regulation: Tokens that represent ownership in property are legally considered securities. That means they need to follow strict capital markets rules.
Licensing: Exchanges where these tokens can trade must be approved, like stock exchanges are today.
Early stage: Tokenization platforms are still young. Demand is growing, but the infrastructure needs time to mature.
Dubai, Switzerland, and Singapore are leading the way, but this will roll out step by step.
Global Examples Leading the Way
tZERO (USA): Offers trading of tokenized shares and funds. Still niche, but a real proof of concept.
SDX (Switzerland): A blockchain-based exchange licensed by Swiss banks.
INX (Global): Licensed in multiple jurisdictions for security token trading.
Dubai Pilots: VARA and DLD are building sandboxes that could soon include regulated secondary trading.
Benefits for Different Players
For Investors:
Invest with small tickets ($500) and still have an option to exit early.
Diversify globally, moving money between Dubai, Europe, Asia.
Earn rental income AND capital gains.
For Developers:
Sell projects faster by attracting a wider pool of investors.
Use tokenization as a marketing advantage (“our properties are tradable”).
For Regulators:
Position their country as a global financial hub.
Attract new capital inflows through safe, transparent frameworks.
Challenges We Must Overcome
Thin markets: If too few people want to buy or sell, there won’t be real liquidity.
Valuations: Tokens may fluctuate even if the actual property hasn’t been sold.
Education: Many people still confuse tokenization with crypto speculation. Clear communication is key.
Trust: Investors need confidence that these platforms are regulated and secure.
The Road Ahead
Secondary markets are the “holy grail” of tokenization. They complete the cycle. They turn tokenized property from a nice innovation into a true financial revolution.
We’re not fully there yet — but we’re close.
Regulators in Dubai (VARA, DLD, ADGM) are preparing frameworks.
Licensed exchanges in Europe and the US have already gone live.
Investor appetite is obvious — Dubai’s tokenized villa selling out in 5 minutes proved that.
In the next 3–5 years, buying and selling a token in a Dubai apartment could feel as natural as buying Tesla shares today.
Closing Thoughts
Tokenization gave us the “entrance door” into real estate with smaller tickets and global access. Secondary markets will give us the “exit door.”
When both doors are open, real estate becomes liquid, borderless, and truly accessible to everyone.
That’s the vision. And Dubai, once again, is at the center of it.