Viktorija Vanagė: Isegi kui suured pangad rahaturul kraanid lahti keeravad – enam kui küll

Enne 2023. aastat ilmunud artiklite tekstid on loetavad inglise keeles.

This year will be more successful for crowdfunding platforms than the quiet and growth-marked past years. Such trends are shaped by shrinking bank financing - as they like to say, "turned taps" - for real estate projects and the attractiveness of this market, which has not yet subsided.

As the Lithuanian housing market recovers faster than predicted after the quarantine and housing demand grows, the business needs to borrow for the development of real estate projects also remains high. In the meantime, when banks start to consider the real estate business as a high-risk sector, they have to look for alternative sources of financing. So they are increasingly turning to crowdfund platforms, where projects were funded quickly even during the quarantine, and the platforms could always offer short-term procedures.

During eight months of this year, four crowdfunding platforms operating in Lithuania with real estate (NT) pledges have mobilized about 23.3 million. EUR, data from PROFITUS and the Bank of Lithuania (LB) show. In August alone, about 3.5 million were lent to businesses and the development of real estate projects through these platforms. EUR: more was mobilized only in February (EUR 5.3 million) and June (EUR 3.6 million).

On the other hand, investors were also very active. During the quarantine, people, with more time and spending more of it online, have more often found the opportunity to invest in crowdfunding platforms. But an even more important aspect was that some "pressure" to invest is really high: household financial assets are growing, inflation is growing, and the possibility of making deposits, due to low-interest rates, is very unattractive.

This made it possible to introduce as many as 172 new real estate projects to the market - as many as 25 each in August, July, and April. This is just one project less than last year in the whole year. However, this result could have been even better. As I mentioned, there is a lot of money in the market, investors are willing to lend, and there is no shortage of potential to borrow from alternative sources: in neighboring Latvia and Estonia, the market share of alternative lending is 5-6 times higher than in Lithuania. So, the business should take advantage of this opportunity.

According to the LB, over the past 10 years, the financial assets of Lithuanian households (cash and deposits, equity instruments, shares of investment funds, pension systems, etc.) have more than doubled - from 24.9 billion Up to 50.4 billion euros. During the same period, cumulative inflation, according to the information provided by the Department of Statistics, amounted to as much as 17.1 percent. Meanwhile, household deposit interest, according to LB data, fell from 0.54 to 0.17 percent in five years and thus is significantly lower than inflation.
Not only that, but the loans themselves are also cheap for business: in the Eurozone, mortgage interest rates (mortgage interest rates), which have a significant influence on the final price of real estate, are consistently decreasing. They are also decreasing in the major European economies - Germany, Great Britain, France, Italy, Holland, and others.

I notice that recently the crowdfunding platforms operating in Lithuania have been reducing interest rates. This is a good sign as it increases competition in the overall lending market. And investors are willing to lend at lower interest rates, but with less risk. Comparing the first year of PROFITUS activity with the second, the interest rate decreased even from 10.3 percent. to 9, and the last projects we financed were with record low-interest rates - for example, 6 or 7.5 percent.