Real estate crowdfunding has been growing steadily since its inception and is poised for a boom in the near future.
The reason for this growth is that real estate crowdfunding is accessible to entrepreneurs and start-ups on a global scale, allowing them to raise capital by tapping into the general population's appetite for investing in property.
In 2019, the global real estate crowdfunding market generated a revenue of $120.7M and is expected to grow at a CAGR of 33.4% (2020-2028), reaching $851.3M by 2028. Globally, crowdfunding is expected to bring in $114 billion in revenues by 2021. And while this huge growth is partly due to more and more people turning to crowdfunding for their investment needs, the biggest driver will probably be the expansion of the investor pool as new regulations make investing a lot easier for individual investors.
The Asia Pacific Market claims the largest share of 53.20% of real estate crowdfunding. Crowdfunding in North America is dominated by the United States with various crowdfunding activities for different types of industries and causes reaching $17.2B annually.
In 2025, the global crowdfunding market is forecasted to grow up to $200B with a Compound Annual Growth Rate (CAGR) of more than 15%. At that rate and based on the prevailing market condition, the crowdfunding industry may double its size.
Crowdfunding has proven to be a valuable force in the real estate industry, enabling more people to invest in properties that interest them.
With the increasing number of investors, however, comes the issue of not knowing where and how to invest. According to reports, about 36% of Americans aren't familiar with crowdfunding. With many new investors looking for opportunities and new crowdfunded projects launching every day, there is still much room for growth.
Another trend to look at is that 17% of the crowdfunding activities are done using mobile devices. With the growing utilization of mobile phones for such activities, it's only natural to see more mobile apps and other functionalities being used as tools for crowdfunding. Issuers who utilize mobile apps to monitor performance, update investors about the project's initiatives, and other reports could be one of the deciding factors for an investor to invest.
While it can be difficult to forecast growth, especially in the real estate industry with its inherent risks, there are promising signals that indicate real estate crowdfunding is well on its way to becoming a viable investment option. In the past few years, real estate crowdfunding platforms have seen a significant rise in real estate projects, which indicates the growing popularity of investing in property through crowdfunded platforms.
Ease of use and convenience are the main factors contributing to the growth in popularity of crowdfunding platforms, as well as their accessibility through mobile devices.
With these reports of forecasted growth and opportunities in real estate, now may be the best time to explore the potential of real estate crowdfunding in diversifying your investment portfolio. Check EquityDoor’s Marketplace to access information about various real estate projects currently being offered.