WASHINGTON, Sept. 25, 2023 (GLOBE NEWSWIRE) -- As per Vantage Market Research, the accessibility and variety of investment opportunities, the ease with which individuals can participate, and the growth of online platforms have all contributed to the steady growth of the global real estate crowdfunding market over the years. These factors have made real estate crowdfunding more convenient and transparent for investors.
According to Vantage Market Research, the Global Real Estate Crowdfunding Market is estimated to be valued at USD 161.8 Billion by 2030 and is expected to exhibit a CAGR of 45.9% during the forecast period 2023 to 2030. The global Real Estate Crowdfunding market grew to USD 11.5 Billion in 2022.
Real estate crowdfunding is a process for raising money for real estate ventures from a group of investors. By democratizing the real estate investment process, it enables regular people to make investments in homes that were previously only open to wealthy investors. It offers the chance for investment diversification and perhaps higher returns.
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Key Highlights
- By property type, residential real estate crowdfunding platforms have witnessed an 84% increase in investment activity compared to the previous year.
- North America has generated more than 36% of revenue share in 2022.
- Asia Pacific and European Regions are expected to expand at the fastest CAGR between 2023 and 2032.
The way that people and businesses invest in real estate has been revolutionized by the real estate crowdfunding market. Using this cutting-edge platform, investors can pool their resources and take part in bigger real estate initiatives, like residential or commercial developments. It gives investors the chance to diversify their portfolios of investments and gain access to real estate assets that were previously only available to institutional investors. Additionally, the crowdfunding model makes it easier and more effective for real estate developers to raise money. In general, the real estate crowdfunding market's applications have democratized the investment landscape and created new opportunities for both investors and developers.
Top Companies in The Global Real Estate Crowdfunding Market
- AHP Servicing LLC (U.S.)
- Crowdestate AS (Estonia)
- CrowdStreet Inc. (U.S.)
- DiversyFund Inc. (U.S.)
- EstateGuru OÜ (Estonia)
- Fundrise LLC (U.S.)
- Groundbreaker Technologies Inc. (U.S.)
- Groundfloor Finance Inc. (U.S.)
- RealCrowd Inc. (U.S.)
- RM Technologies LLC (U.S.)
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Factors Affecting the Growth of the Real Estate Crowdfunding Market
There are several factors that can affect the growth of the Real Estate Crowdfunding industry. Some of these factors include:
- Market demand: The demand for alternative investment options has an impact on the growth of the real estate crowdfunding market. The demand for real estate crowdfunding platforms rises as more people look for diversification and greater returns on their investments.
- Economic conditions: The development of the real estate crowdfunding market is significantly influenced by economic variables such as interest rates, inflation, and employment levels. When the economy is doing well, investors are more likely to direct their money toward real estate projects, which promotes market expansion.
- Transparency and investor confidence: The real estate crowdfunding market's expansion heavily depends on investor confidence. Transparency in project disclosure, financial disclosure, and risk disclosure increases investor confidence, which increases participation and promotes market expansion.
- Technological developments: Market expansion in the real estate crowdfunding sector may be significantly impacted by the adoption and development of new technologies. Innovative features, user-friendly platforms, and safe transaction procedures can improve investor experiences while growing the market and luring new investors.
Top Trends in Global Real Estate Crowdfunding Market
A number of new trends are appearing in the global real estate crowdfunding market that is changing how investors engage in the sector. The development of international crowdfunding platforms, which give investors access to real estate opportunities all over the world, is one significant trend. A further change in the market is a move towards fractional ownership models, in which investors can own a portion rather than the entire asset. Additionally, the use of blockchain technology is gaining popularity and will increase the security, efficiency, and transparency of real estate crowdfunding transactions.
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Recent Development of the Global Real Estate Crowdfunding Market
- On April 18, 2023, the debut of CrowdStreet REIT I (also known as C-REIT) with iCapital has been announced by CrowdStreet Advisors. This increases the fund's accessibility since it was previously only accessible through CrowdStreet channels and is now also available through iCapital channels.
- On May 24, 2023, Ben Miller, the chief executive officer of Fundrise, is attempting to build a USD 500 million credit fund to profit from the US commercial real estate sector's growing crisis.
Market Drivers
Due to several factors, the real estate crowdfunding market has seen significant growth in recent years. First, the democratization of real estate investing has been instrumental in enabling people to take part in initiatives that were previously only open to wealthy investors. Additionally, platforms that offer a variety of investment options have made it simpler for investors to find and choose opportunities as a result of the industry's digitization. The market growth has also been aided by the emergence of millennials as potential investors, who favor digital investment platforms and place a high value on the social and environmental effects of the real estate projects they back.
Market Restraints
The regulatory environment is a significant barrier to the real estate crowdfunding market. Although real estate crowdfunding platforms have grown in popularity recently, they continue to face regulatory obstacles and limitations that may restrict the market's expansion. For instance, some nations have strict laws governing crowdfunding that make it challenging for platforms to function. Additionally, laws may differ between different countries, creating uncertainty and complicated legal issues for those who participate in the real estate crowdfunding market.
Market Opportunities
As the real estate crowdfunding market continues to draw in investors from around the world, there are many opportunities for growth in the future. The democratization of real estate investment, which enables people to pool their resources for bigger projects, is one distinctive feature. Furthermore, cutting-edge technologies like blockchain and smart contracts promise to further streamline the crowdfunding process while boosting participant transparency and trust. Additionally, the market is growing internationally, opening up opportunities for cross-border investments and access to previously inaccessible markets, giving investors a variety of opportunities.
Browse market data Tables and Figures spread through 146 Pages and in-depth TOC on Real Estate Crowdfunding Market Forecast Report (2023-2030).
Report Segmentation of the Global Real Estate Crowdfunding Market
Investor Type Analysis
Investor type, with individual or retail investors being the dominant category, is important in the real estate crowdfunding market. Individual investors find crowdfunding to be an appealing option because of its low investment minimums and benefits of diversification, especially with the rise of technology platforms providing simple access to investment opportunities. This category is the most common investor type in the real estate crowdfunding market because it enables investors to take part directly in real estate deals without requiring extensive knowledge or sizable amounts of capital.
Property Type Analysis
Residential real estate stands out as the most prevalent property type in the real estate crowdfunding market. This is mainly because residential properties are more familiar and are thought to carry a lower risk. Since they are frequently viewed as more stable and understandable than commercial or industrial properties, single-family homes, and condominiums are assets that the general public, including individual investors, have a higher affinity for investing in. The high demand for housing and the reliable potential for rental income are additional factors contributing to residential real estate's dominance in crowdfunding.
Platform Type Analysis
Equity-based platforms are the most prevalent type of platform in the real estate crowdfunding market. Equity-based platforms give investors the chance to become shareholders in real estate projects, giving them the chance to benefit from potential capital growth and a portion of the rental income. Since both investors and developers stand to gain from a project's success, this dominance can be attributed to their shared interests. Equity-based platforms also draw knowledgeable, experienced investors who are willing to take on greater risk in exchange for higher returns than those provided by debt-based platforms.
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Market Segmentation
By Investor Type
- Individual Investors
- Institutional Investors
By Property Type
- Residential
- Commercial
- Mixed-Use
By Platform Type
- Equity Crowdfunding
- Debt Crowdfunding
- Hybrid Crowdfunding
By Region
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East & Africa
Scope of the Report:
| Report Attributes | Details |
| Market Size in 2022 | USD 11.5 Billion |
| Revenue Forecast by 2030 | USD 161.8 Billion |
| CAGR | 45.9% from 2023 to 2030 |
| Base Year | 2022 |
| Forecast Year | 2023 to 2030 |
| Key Players | AHP Servicing LLC, Crowdestate AS, CrowdStreet Inc., DiversyFund Inc., EstateGuru OÜ, Fundrise LLC, Groundbreaker Technologies Inc., Groundfloor Finance Inc., RealCrowd Inc., RM Technologies LLC |
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Regional Analysis
North America is the area with the greatest real estate crowdfunding market. Platforms like Fundrise, RealtyMogul, and PeerStreet have been driving this expansion in recent years. The area is a desirable location for real estate crowdfunding because of its robust economy, supportive policies, and significant investor demand. In addition, the region's dominance in the sector has been aided by the presence of well-known financial centers like Silicon Valley and New York. Additionally, one of the global regions with the fastest growth rates in the real estate crowdfunding industry is the Asia-Pacific region. As investor interest has increased, the market has seen cutting-edge platforms and strong regulatory frameworks. This has drawn both domestic and foreign investors, fostering transparency and enabling access to as-yet-undiscovered real estate opportunities. The region's thriving real estate crowdfunding market is a result of its expanding economy, thriving tech sector, and rising urbanization.
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