Real estate crowdfunding: the tide is turning


Accessible online, from just a few tens of euros of investment, crowdfunding (crowdfundingin English) real estate continues to attract savers.

It must be said that the returns are attractive: according to the latest barometer of crowdfunding in France carried out by Mazars and Participatory Financing France, the average annual performance of projects financed in 2022 reached 9.4%, which is moreover for a period of immobilization average funds short, twenty-one months. That’s more than inflation, which is rare these days.

The average annual performance of projects financed in 2022 reached 9.4%

This type of crowdfunding consists of participating, with other investors, in an online fundraiser in order to help a real estate professional (developer, property dealer) to finance part of his operation (construction, rehabilitation, conversion).

Proof of the general public’s enthusiasm for these investments, “annual collection in 2022 once again broke a record, reaching 1.6 billion euros, i.e. 25% more than in 2021”, explains Bertrand Desportes, partner at Mazars, an audit and consulting firm. He specifies that the “two thirds of projects are financed via bonds” and “real estate represents more than two thirds of the collection of all crowdfunding”.

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Despite these results, the mechanics of this hitherto well-oiled machine is beginning to seize up, as the situation in the stone is deteriorating. Since 2022, developers have struggled to market all of their residential real estate operations because potential buyers are becoming rarer.

In an uncertain economic context and faced with the loss of purchasing power caused by inflation, individuals are reluctant to embark on a real estate project. Many have also come up against soaring credit rates, and are struggling to cash in on the general increase in selling prices linked to the rise in the price of raw materials and construction costs.

Delayed refunds

As a result, not only has the number of new housing reservations at the national level fallen by nearly 30% over one year, according to the Federation of Real Estate Developers, but in addition, ” since a few months, the share of reservation cancellations is around 22% nationally, compared to the usual 13%”points out Pascal Boulanger, its president.

These headwinds have direct effects on crowdfunding operations. Faced with the general slowdown in their activity, some promoters who have raised funds through a financing platform are unable to repay investors on time, at the end of the deadline set at the start, i.e. say often between eighteen and twenty-four months. Admittedly in the minority, these delays are increasing.

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