The 2023 Real Estate Crowdfunding Report by Walliance and Politecnico di Milano Was Presented

Walliance in collaboration with the Politecnico di Milano, presented the ‘Real Estate Crowdfunding Report 2023’, an in-depth and comprehensive analysis on the state of real estate crowdfunding globally.

The report, now in its seventh edition, represents a point of reference for operators in the sector and investors interested in exploring the new opportunities offered by the real estate crowdfunding market.

Real Estate Crowdfunding Grows Worldwide

The study provides a detailed view of the market dynamics, offering investors and industry operators valuable tools to understand and navigate the opportunities offered by real estate crowdfunding.

The report reveals that globally, real estate crowdfunding has exceeded all expectations, reaching a cumulative collection of €52.7 billion by the end of 2023, a significant increase from €45.2 billion the previous year.

Despite the challenges posed by rising global interest rates and geopolitical uncertainties, the market has shown remarkable resilience, with the European Union contributing €124 billion, including €26 billion in 2023 alone.

Growth in the USA, Europe and Italy

In the United States, the cumulative total value of collections reached 28.2 billion euros, with an increase of 3.1 billion euros in the last year.

The European Union recorded a collection of 12.4 billion euros, where France established itself as the market leader, followed by Germany and Italy, the latter growing with a collection of 180 million euros in 2023.

The major platforms have consolidated their position, with 38% of the market held by the top five platforms.

In Italy, real estate crowdfunding has seen a cumulative collection of 544.5 million euros through 1,314 campaigns, with an increase of 17% compared to the previous year.

Investments and returns in detail

The analysis of European investors’ preferences revealed an increase in interest in residential projects in rural or tourism-related contexts, with 47% of campaigns financed in these areas. In addition, 64% of projects involved new construction, demonstrating a strong demand for development projects.

A crucial aspect highlighted by the report is the analysis of projects in difficulty. The percentage of projects with repayment delays of less than 6 months is increasing again (from 6.8% in 2022 to 8.7% in 2023) but the percentage of projects with delays of more than 6 months or in default is decreasing (from 12% to 9.3%).

In terms of returns, real estate crowdfunding platforms have recorded variable but generally positive results.

Equity vs lending

Lending-type projects have delivered average annualized net returns of around 10%, with some platforms achieving returns above 12%.

On the other hand, equity projects, while presenting a higher risk, have shown a higher return potential, with annualized ROIs that in some cases exceeded 15%.

Giacomo Bertoldi , Chief Executive Officer of Walliance, said: “The real estate crowdfunding market has undergone significant changes in 2023, but has demonstrated its resilience and ability to adapt. It is precisely in this context that we are happy to announce the birth of a new investment product, “Landlord”. It will soon be possible to invest in income-generating properties and create a portfolio with periodic returns from residential rentals.”

Giancarlo Giudici , Professor at the School of Management of the Politecnico di Milano, added: “The Real Estate Crowdfunding Report 2023 confirms the importance of this tool as an alternative form of financing, capable of democratizing access to the real estate market. With constant growth also in Italy, real estate crowdfunding represents an interesting solution for portfolio diversification and for access to investments that offer competitive returns.”

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(Featured image by Tierra Mallorca via Unsplash)

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