Real Estate Crowdfunding: A Record First Half of 2018

The real estate crowdfunding market did wonderfully in the first half of 2018, with 126 projects financed and 62 million euros collected. Residential projects accounted for 57% of collections.

After a record year in 2017, with more than 100 million euros collected and 29 million euros returned, real estate crowdfunding is still on the rise in 2018. With an average annual return of 9.7% (up 0.2 percent compared to the first half of 2017), real estate crowdfunding remains an attractive investment. In fact, according to a study of 23 crowdfunding platforms, conducted by the crowdfunding platform Fundimmo, in collaboration with Hellocrowdfunding, the first half of 2018 broke all records, with more than 62 million euros collected (+ 72% over one year).  The number of projects financed by crowdfunding has also increased greatly, with 126 projects in the first half of 2018, compared to 85 in the first half of 2017. On the return side, more than twice as much as last year has been recorded so far this year, with 19 million euros returned. The number of projects seeing return has also increased sharply, with 49 projects in the first half of 2018, compared with 31 in the same period last year.

Île-de-France remains the most dynamic region for crowdfunding

Compared to the first half of 2017, the top 4 most active crowdfunding regions in France remain the same.  The Île-de-France region remains at the forefront, ahead of l’Auvergne-Rhône-Alpes, la Provence-Alpes-Côte d’Azur, and l’Occitane. “Despite the prospect of municipal elections in 2020, which will curb building permits, there is a positive growth of financing requests throughout the country.” concludes Stéphane Bombon, President of Fundimmo.  As for delays on return, they are more frequent, with an average rate of 11.3% since 2012. However, on closer examination, there is a concentration of delays on only a handful of platforms. Indeed, among the 23 participating platforms, 18 have no delays, 2 have a delay between 0% and 25% and 3 others have a delay of more than 25%.

Nearly 6 out of 10 projects funded are residential. © Fundimmo

Increasingly diversified projects

There is also great diversity in the type of projects being financed by crowdfunding. Among the 126 projects financed in the first half of 2018, 57% were residential projects, 14% were real estate-related, 10% were development projects, 8% were retail, 5% were hotel projects and 5% were projects of other types. “Among the 23 crowdfunding platforms offering real estate projects, we’ve noticed a greater diversification of projects. For example, the altruistic purpose appeals to investors who want to dedicate their resources for a return on investment all while doing it in a humanistic way. This is the case for the financing of social housing construction. Beyond the social dimension, this category of project also has the advantage of having a limited risk,” notes Jérémie Benmoussa, Managing Director of Fundimmo.

“These figures also reflect the increase in the amounts collected: €499,786 on average per project compared to €423,529 in the first half of 2017 (…) Logically, this leads to an increase in the average investment period, from an average of 16.9 months in the first half of 2017 to 19 months.” – Stéphane Bombon, President of Fundimmo.

Original Article: seloger.com, Crowdfunding immobilier : 62 millions d’euros collectés au 1er semestre 2018

Image: Pile of euro notes, taxrebate.org.uk