The real estate sector is one of the most successful application of online investing, which has open several investment opportunities – until recently reserved only to a few – to retail investors. Such success is well reflected in the numbers: real estate crowdfunding grew 156 percent in 2014, just breaking the $1 billion mark, with campaigns ranging in size from less than $100,000 to over $25 million. Overall, real estate crowdfunding is expected to increase by 150 percent, equaling $2.57 billion in 2015, making it one of the fastest-growing industry segments of online investing.
However, in the case of Asia, the regulatory landscape is often not able to accommodate this paradigm. If in western countries real estate investment has not yet achieved its full potential because of restrictive regulations for this new tool, in Asia the market is slowed down by complex and often under-the-table bureaucratic processes to get approval for property development projects. On the other hand, digital investing helps fostering transparency in real estate projects by providing more information and details on the developer and its company, thus limiting the risk of fraud.
Despite red tape and non-transparent bureaucracy, a few online investing platforms have started operating in the local real estate sector and are on boarding new investors and projects. The future for them looks bright: Asia’s economy is booming in certain areas, there is population growth, the real estate demand continues to grow. But they will also have to do a lot of work to educate the market, establish trust and more transparency.
Tung, Y.H. (2015). Can real estate crowdfunding platforms thrive in Asia? e27
Massolution. 2015CF-RE Crowdfunding for Real Estate.
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.