Login
You are...
Products
Business account A professional account with far more comprehensive services than a traditional bank Collection Cash your customers quickly and easily Accounting Anytime provides invoicing software, facilitates your accounting and helps you with administrative formalities. Financing Discover a wide range of services to support your growth. Whether you're self-employed or a large company, our solutions are tailored to your needs. Cash Management View the banking position of all your activities in real time. Put in place an analytical vision of your flows and give meaning back to your banking operations.
Mastercard business cards Discover the services and Mastercard cards available to you. Corporate expense management Capped Mastercard cards with employee rights management. Managing association expenses The dedicated solution for associations to manage their business expenses. Insurance and legal protection Insurance is included in cards or packages, and meets the needs of both the self-employed and large companies. Chartered Accountants To make your life easier and avoid errors in your declarations, entrust your accounting to chartered accountants.
Expense management
Rates

Real estate crowdfunding success: what is the impact of the health crisis?

Published on January 25, 2021 - 2 mins reading time
Bank watch
In 2020, real estate crowdfunding raised 505 million euros, an increase of 35% in one year, for an average return of 9.3%. Despite these strong performances, real estate crowdfunding could feel the effects of the crisis over the next two years. Here's a closer look at the successes and risks ahead.

Real estate crowdfunding, an investment that pays off

Real estate crowdfunding enables private investors to invest in real estate development projects or property transactions via online platforms. The entry fee is generally low, set at 1,000 euros on most platforms, which means that savings can be invested and interest earned at the end of the project.

In 2020, participatory financing in real estate was one of the highest-yielding investments, with an average annual return of 9.3%. Fundraising was up 35% on 2019, at 505 million euros versus 373 million in 2019, representing 41% of total fundraising since 2016.

589 projects were financed in 2020, 8% more than in 2019, for an average amount per collection of €857,329, compared with €689,150 in 2019. The average investment amount also increased: from €1,581 in 2019, it jumped 198% to €4,711 in 2020.

Despite the Covid-19 crisis, real estate crowdfunding thus proved resilient, even as construction sites were put on pause during the first half of 2020. The number of investors increased by 20%.

Health crisis: what impact on real estate crowdfunding?

At first glance, all the signs are green for those wishing to invest in this type of participative financing. Particularly in view of the current situation, where banks are demanding more equity from developers and property owners, who are increasingly turning to real estate crowdfunding.

However, this investment is not without risk. Between collection and repayment, a period of 18 to 24 months elapses, which means that the real, global impact of the crisis can only be fully measured over the next two years. Delinquency and default rates could therefore rise significantly in late 2021, 2022 and 2023.

Admittedly, the risk remains limited, since in the event of late repayment, investors continue to receive interest, which can sometimes be increased if the delay exceeds 6 months. What's more, the platforms are keen to reassure, and claim to be more demanding when it comes to project selection.

In addition, several real estate crowdfunding players are currently working on the creation of a guaranteed fund, with a loan offer that will ensure full repayment to investors, whatever happens. On the other hand, this lower risk would be accompanied by a lower return, set at around 5-6% per annum.