It's no secret that the real estate market is on the rise, but the COVID-19 pandemic has caused an attack on other unknown properties on the ground.

Some investors are paying millions for land - not in New York or Beverly Hills, not on the ground but on the Internet - in a group of virtual worlds he has dubbed the metaverse.

Plot prices have risen as much as 500% in the past few months since Facebook announced it was working comprehensively on virtual reality, even changing the company's name to Meta Platforms.

“Metaverse is the next iteration for social media,” said Andrew Kegel, CEO of Toronto-based Tokens.com, which invests in real estate in the Metaverse platform and digital assets related to non-fungible tokens.

"You can go to a carnival, or to a concert, or to a museum," Kegel said of the interaction within this world.

In these virtual worlds, real people interact as cartoon-like characters called avatars, similar to a real-time multiplayer video game.

Today, people can access these worlds through a regular computer screen, but in the future Meta and other companies have a long-term vision of building immersive worlds, which people can access through virtual reality glasses like Meta's Oculus.

A recent report by Crypto Asset Manager Gray Skull estimates that the digital world could grow into a $1 trillion business in the near future.

Here, major artists - including Justin Bieber, Ariana Grande and DJ Marshmello - appear as fictitious characters.

Even Paris Hilton threw a New Year's Eve party on her virtual private island.

Kegel recently sold a plot of land in Decentraland - one of its many famous metaphysical worlds - for nearly $2.5 million. "Price has gone up 400% to 500% in the past few months," Kegel said.

Another world where the rich want to buy plots of land is Sandbox, where virtual real estate developer Republic Realm has spent a record $4.3 million on a virtual plot.

Owner Yorio told CNBC that her company sold 100 virtual private islands last year for $15,000 each. "Today, they sell for about $300,000 each, which is the same average home price in America," she said.

Risky investment

“The digital world is, to some, just as important as the real world,” Miami-based real estate broker Oren Alexander told CNBC. “It's not about what you and I believe, it's about what the future does.”

Just as good land conditions are in the real world, land in metaverses is good based on its location, says Kegel.

"Areas where people congregate in metaverses will certainly be much more valuable than areas without any ongoing events," Kegel adds.

"Think about Monopoly real estate," Kegel added. "We just bought Boardwalk - an area of ​​England that's in the Monopoly game - and the surrounding area."

"The areas where people congregate are much more valuable for advertisers and retailers to find ways to reach this demographic," he added.

For example, American singer Snoop Dogg is building a virtual mansion on a plot of land in Sandbox, and someone recently paid $450,000 to be his neighbour.

Buying virtual land is very simple, either directly from the platform or through a developer.

Investors build on their land and make it interactive.

"You can decorate it, change it, renovate it," says Yorio. "It's a symbol."

But Yorio warns that investing in digital real estate is a risky business.

"It's very risky. You should only invest the capital you are willing to lose."

"It's not static. It's based on the blockchain. As we all know, cryptocurrencies are very volatile. But they can be hugely rewarding," Yorio told CNBC.

"I wouldn't put money in this world unless I'm willing to lose it," says Mark Stabb, a professor of real estate selling practice theory at Arizona State University.

"If the increase continues the way it's going, it's likely to be a bubble. You're buying something unrelated to reality," Stabb adds.