Italian Real Estate Lending Crowdfunding Collection Grows by 50% Compared to 2022

The rapid growth of real estate lending crowdfunding continues in Italy. According to data from the Crowdfunding Buzz Observatory, during the year just ended, the lending crowdfunding portals specialized in real estate raised more than 137 million, 50% more than in 2022, when the collection was 91 millions.

If you want to read more on the subject and find the latest financial news of the day, download for free our companion app Born2Invest.

The drivers of the growth in Italian real estate lending crowdfunding

The growth is attributable both to the increase in the number of projects financed and to the average collection per campaign.

There were 411 successful campaigns in 2023 compared to 335 in the previous year, while the average collection grew from 274,000 euros in 2022 to 334,000 in the past year.

But the increase is also due, in part, to the increase in investments which, if they were 53,000 in 2022, rose to 60,000 in 2023. The average investment, however, is irrelevant, which has essentially remained constant (€3,200 in 2022 and €3,100 in 2023).

Interest rates and duration of loans

The interest rates offered by proponents, in 2023, decreased slightly from 10% to 9.8%. A reduction which, although minimal, is surprising taking into account the general increase in the cost of money.

Furthermore, the average rate offered ranges from 8.2% to 12.1%, depending on the platforms (and, naturally, the projects).

However, the average duration of the loans increased significantly, going from 11.8 months in 2022 to 12.5 months in 2023. Here too with a certain variability ranging from 8.5 to 12.7 months depending on the platforms.

The performance of the platforms

Recrowd, a leading platform already in 2022, raised 69.5 million, more than doubling the 32.2 of 2022 and considerably increasing its market dominance. If, in fact, its share in 2022 was 35%, in 2023 it reached an absolute majority with 51%.

Instead, 4 platforms have now exceeded 10 million in collections (there were 3 in 2022): Bridge Asset has been added to Recrowd, Yield Ethical and Trusters, already above 10 million in 2022.

Yield Ethical is the only one whose collection decreased from 24.3 million in 2022 to 19.2 in 2023. Trusters instead grew from 15.3 to 16.3 million and Bridge Asset made a significant leap forward, going from 4.9 million in 2022 to 13.2 in 2023.

Immediately behind the leading quartet, we highlight Leone Investments which, launched in 2022, raised 4.4 million last year.

The other 12 platforms that successfully closed at least one campaign in 2023 raised a total of 14.6 million compared to 13.5 in 2022, with an overall market share, therefore, of 11%.

The burden of delays in granting authorizations to the new EU Regulation
The collection of Italian lending crowdfunding, in all likelihood, could have been even higher.

On November 10th the new European regulation on crowdfunding came into force which strictly required platforms to obtain authorization to continue operating after that date.

The serious delay with which the Italian institutions implemented the new rules and issued the implementing regulations (May 2023!) triggered a blockage of the authorization processes carried out by Consob and the Bank of Italy, also due, we understand, to requests for organizational and procedural type not foreseen (not even by the European regulation itself).

The result is that to date, of the 17 real estate lending crowdfunding platforms, only 5 have been authorized: Recrowd, Yield Ethical, Trusters, Leone Investments and Crowdlender (Opstart group). Furthermore, we do not know whether all 17 platforms have submitted the authorization application.

Returning to the numbers, in the months of November and December 2023, collection was 14.8 million compared to 20.8 in the same months of 2022 (30% less).

On the contrary, in the previous 10 months (from January to October), collection amounted to 122.5 million compared to 70.9 million in the same period of 2022, therefore with a growth of as much as 70%.

__

(Featured image by geralt via Pixabay)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in Crowdfunding buzz. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.