Balance and boom of Real Estate crowdfunding in 2023

Balance and boom of Real Estate crowdfunding in 2023

Balance and boom of Real Estate crowdfunding in 2023

The surge of crowdfunding in real estate on a global scale is undeniable. The tightening access to traditional financing, technological advancements, and sector regulation have strongly propelled this new financing model, solidifying its growth in both volume and investor confidence.

In fact, with just over a decade of history, crowdfunding is beginning to rival traditional formulas such as banking and venture capital, leaving behind its secondary role of a few years ago. Its advantages are evident: real estate developers gain access to liquidity quickly and reliably, and retail investors enjoy attractive returns by accessing asset types that were previously out of reach.

The numbers corroborate this trend. Globally, real estate crowdfunding accumulated over €45.2 billion in 2022, according to data from the latest Real Estate-Crowdfunding Report, conducted by the research group of the Crowdfunding Observatory of the Polytechnic University of Milan and the Italian real estate crowdfunding platform Walliance. Thus, compared to the €36 billion accumulated by the end of 2021, there has been a significant reactivation after the pandemic hiatus, with a 25.5% increase.

Market distribution

This substantial growth is also reflected in the EU market, which totals €9.8 billion in financing operations, of which €2.8 billion corresponds to 2022. By volume, France leads with €1.3 billion raised, followed by Germany with €629 million, and Estonia with €210 million, emerging as the most powerful markets. Spain, on the other hand, accumulated €116 million in 2022.

While, in global terms, the United States stands as the main market—both in the number of active platforms and the capital raised—ahead of Europe, with an accumulated financing volume of over €25 billion. In the rest of the world, real estate crowdfunding accumulated around €10.3 billion.

The report also analyzes a total of 146 crowdfunding platforms, with 79 operating in the European Union. With 12,210 funded projects and €7.43 billion, these companies represent 76% of the ecosystem. Another 24 platforms operate in the United States, and 43 in the rest of the world.

Urbanitae, among the top 25 platforms in Europe

Within the European context, only two Spanish platforms are among the top 25 by revenue. Urbanitae, the first positioned at 16th place, is also the leading platform in profitability throughout the European Union, with an annual average of 16%. This prominent position is expected to rise in the 2023 ranking, a year that will conclude with over 130 funded projects and a volume exceeding €200 million.

Potential of crowdfunding in Spain

Estimates for the global real estate crowdfunding market are also optimistic, and according to this report, it could surpass $30 billion in the United States, €12 billion in the European Union, and €11 billion in the rest of the world.

Regarding Spain, our CEO, Diego Bestard, stated in a recent interview published in El Economista that the growth potential of crowdfunding is enormous. “In other countries in our environment, alternative financing represents between 40 and 60% of the total in real estate. In Spain, around €10 billion in developer credit is granted each year. Considering these figures, we could say that we have a gap of €4-5 billion that could be channeled through crowdfunding. If we also consider that there are over €1.3 trillion in deposits in our country, the growth possibilities are exponential,” says Bestard.

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