Abstract

MATIAS, Miguel Neves. The role of crowdfunding in promoting real estate industry. Forum Sociológico [online]. 2019, n.34, pp.51-60.  Epub Aug 04, 2021. ISSN 0872-8380.  https://doi.org/10.4000/sociologico.4778.

The recent regulation of crowdfunding in Portugal draws attention to the effective contribution that this instrument can have to the development and sustainability of the real estate business. The purpose of this article is to discuss the potential of crowdfunding in the financing of real estate projects, in a context in which the real estate sector has lost dimension in recent years, with all the negative externalities that have arisen, along with a banking system that has been reducing credit exposure to this sector. We analyze the various sources of real estate financing that are alternative to traditional bank credit, focusing on crowdfunding. Based on this analysis, we present in detail the various categories of crowdfunding, their mode of operation and the practical implications for the real estate industry, highlighting their strengths and weaknesses. We conclude that crowdfunding enables investments that are more transparent, accessible, ethical, inclusive and less speculative. But given its small track record, issues arise about what could be the position and relevance of crowdfunding in the real estate financing market.

Keywords : real estate crowdfunding; real estate; internet based finance; investing platforms.

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