Trends in real estate crowdfunding 2018

Posted on 03-12-2017 by F. Geurtsen has researched the emerging trends in real estate crowdfunding for 2018. The report Crowdfunding for Real Estate, discussed, already notes that the global real estate crowdfunding market was already $3.5 billion in 2016. This will only grow, to potentially $300 billion by 2025. 

According to CFX Markets, crowdfunding already makes up $2.5 billion of the total US commercial real estate market of $7 trillion. This indicates great potential growth in the coming years. Despite real estate crowdfunding still being a relatively young concept, real estate crowdfunding will continue to grow in 2018, it is anticipated. Also in the Netherlands.

Real estate crowdfunding can be used for many purposes, according to Crowdfundmarkt founder Frank van der Linden. "A property developer looking for financing for a new commercial property can use crowdfunding to make it happen and for the purchase of a holiday home an individual can raise money via a crowdfunding loan," says Van der Linden.

He continues: "But housing association using the crowd to refurbish rental properties is also exemplary of real estate crowdfunding."

Here are the three real estate crowdfunding trends of 2018.

1. More platforms

Already, many platforms are popping up that focus purely on real estate crowdfunding and in 2018, the addition of new platforms is only expected to increase, it is expected. Currently, there are only a handful of platforms in the Netherlands that focus solely on real estate.

According to crowdfunding expert Ronald Kleverlaan, the supply of real estate crowdfunding platforms is far too small at present. However, Kleverlaan did note that the number is growing slowly and steadily. "I expect this to go much faster in 2018," the expert said.

Crowdfundmarkt's Van der Linden noted that the number of crowdfunding platforms that published one or more projects within the real estate sector increased from 16 in 2016 to 20 in 2017. "More and more platforms are offering real estate projects, including those not specialised in real estate," Van der Linden reported.

2. More money to real estate

With a growth in the number of platforms, the money flowing to real estate through crowdfunding is also expected to increase. In the process, the projects themselves will also grow in size. In the first half of this year, according to Crowdfundmarkt, in terms of funding volume, the most was invested in real estate (18%). In the whole of 2016, this was only 7%, and in 2015 only 4.1%.

3. More experiments with blockchain

Both Kleverlaan and Van der Linden expect platforms to experiment more with blockchain. Both experts point to a pilot recently launched by real estate manager Annexum and fintech startup Bloqhouse to use blockchain technology to make real estate investing accessible to individuals.

This should make it possible to invest in real estate as little as 100 euros. The FinTech company's blockchain technology should facilitate the secondary marketability of individuals' real estate holdings, while this is currently seen as a cumbersome and expensive process.

From a column by