Since the financial and economic crisis in 2007 with extremely low-interest rates, real estate has proven to be an asset with good returns. The corona pandemic has prompted investors to restructure their investments. While the demand for commercial real estate has fallen significantly, “corona-resistant” residential real estate is experiencing an upswing.
Read more about the third crowdfunding campaign launched by the platform RECrowd and find the most important business headlines of the day with our companion app Born2Invest.
Various studies already showed that the crisis has caused housing and house prices in Austria to rise even more
For example, a recent survey by the Austrian National Bank (OeNB) shows that residential property prices in Vienna rose to 4.1% in the second quarter of 2020 compared to the same period last year – after 3.9% in the first quarter. Outside Vienna, prices have become even more expensive: by 6.8 percent, after a plus of 2.8%. In the federal provinces, excluding Vienna, it was mainly single-family homes that were in demand: the price increase here tripled to 10.6% in the second quarter.
According to the National Bank, against the backdrop of the pandemic with home office and social distancing, this could possibly be due to the increased desire for living in green surroundings or with a garden. A representative survey commissioned by Raiffeisen Immobilien came to similar conclusions.
In the private housing market, prices are expected to continue to rise, but large leaps are only possible in regions where affordability is not yet exhausted. The classic suburbs around the conurbations as well as peripheral rural locations could benefit from this.
Low interest rates and turbulent stock markets
Not only the low interest rate environment, but also the volatile development on the stock markets shows investors the value of safe investments day after day. The problem is that by far not everyone can afford to buy apartments and houses. This is where crowdfunding comes in: The financing is provided jointly by a swarm of small investors.
“Investments in residential real estate are particularly interesting for investors with a long-term horizon, especially in times of severe financial market turbulence. With a minimum investment of $303 (€250), we want to make the lucrative real estate market accessible to small investors,” said Kurt Praszl, Managing Director of RECrowd.
In June 2020, in the middle of the pandemic, RE/MAX DCI and the crowd investing pioneer Conda decided to take off together and opened the gates of the RECrowd platform. A goal was to cover for the first time the entire creation of the value chain in the Immo Crowdinvesting.
In the first project, more than $606,000 (€500,000) were collected for a housing estate in Bad Pirawarth, Lower Austria, and the second project is for the conversion of student apartments in Krems on the Danube.
New housing project in the Korneuburg district
Suitably to the boom of the residential real estates at the bacon belt there is since short a new Investment possibility in the upper pipe brook of Lower Austria (Leobendorf with Korneuburg). Surrounded by meadows and forests at the foot of the Michel and wash mountain convenient, six housing units with in each case 125 m2 floor space and generous own gardens are realized by the builder ACTIMMO Liegenschaftsentwicklungs GmbH. “The special feature of this project are the HYGGE BAU houses. HYGGE expresses a feeling of well-being and arrival as soon as you enter a house. We have taken over the responsible task as developers to plan and project a home that should accompany for a long time, offer protection and above all convey the feeling of pure happiness”, says Gerhard Schuller, managing director of ACTIMMO. The future inhabitants enjoy so the advantages of the country life and nevertheless the city is because of the excellent infrastructure to seize close. “The large network in the background by RH/CMAX DCI and Conda is very helpful for us , is Schuller convinced.
Funding threshold reached shortly after campaign start
With the help of RECrowd, up to $303,000 (€250,000) are to be collected. The funding threshold of $48,500 (€40,000) was exceeded just a few hours after the campaign started. Early-bird investors who invest until December 31st will receive interest at a rate of 8% p.a. (thereafter 7.5% p.a.) over the entire term of 1.5 years and with a semi-annual payment.
With the utilization RE/MAX DCI supports considerably. “The current campaign is so to speak of a subsequent project of bath Pirawarth, because it is similarly conceived. Also we succeeded in utilizing all 46 housing units within a short time. Since we can fall back to the large network of RH/CMAX DCI, we are confident to be able to continue this success. In January 2021 with the construction work is to be begun and already at the end of the year the handing over of the house is planned. Our approach is not to produce campaigns non-stop, but to put quality before quantity. Each of our projects has been put through its paces by several experts. This is how we guarantee security for our investors,” Praszl concluded.
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First published in CROWDCIRCUS, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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