A decade ago, in 2014, real estate crowdfunding (or participatory financing) arrived in France. At the time, its investment offer was innovative: access to real estate for a few dozen euros, online subscription plus enhanced returns over a short period, from twelve to thirty-six months. The locomotive of crowdfunding in France with two thirds of national fundraising, the real estate sector is weathering its first storm.
This investment, which finances the operations of property dealers or developer programs, is suffering from falling sales and falling prices. The detonator was the sudden rise in loan rates, undermining the real estate purchasing power of households. Faced with cautious banks, some no longer had access to credit, thinning the ranks of buyers.
On the planet of real estate crowdfunding which, since its beginnings, has been riding a thriving market, it’s a cold shower. “This year, the collection contracted by 25% to 40% depending on the sites,” points out Bertrand Desportes, partner at Mazars France, an audit group. In addition, certain projects funded between 2021 and 2022 do not come to fruition on the planned date.
Delays of more than six months (the most critical) accumulate, increasing from 6.61% in 2021 to 15.15% at the end of 2023. “With the crisis, this beautiful mechanism came to a halt. As long as an operation is not fully commercialized, the professional cannot repay the money to his creditors, including crowdfunders. explains Yves Gambart de Lignières, wealth management advisor in Vannes (Morbihan).
Mobilized, crowdfunding platforms indicate that they are negotiating with stuck professionals to find ways out. “Faced with the clear slowdown in sales, these players above all need to be given breathing space, and therefore time,” comments Frédéric Maxwell, deputy general manager of Eternam, a real estate management company invested in this asset class. “We offer debtors the option of repaying part of the capital and then spreading out payment of the balance and interest over time,” indicates Quentin Romet, founder of Homunity. “The search for compromise is permanent, as is the follow-up”, adds Alexandre Toussaint, president of Baltis.
“Additional guarantees”
Some sites indicate that with this delay they will charge the debtor additional interest, i.e. a future bonus for savers. “If the scenario goes wrong, we can as a last resort initiate legal proceedings”, specifies Matthieu Degli Innocenti, founder of Tokimo. For the moment, the money of the savers concerned is blocked with no certain recovery date. There is also a risk of loss of capital if the cornered operator were to go out of business in the coming months.
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