New | Real estate crowdfunding booms in Asia despite regulatory uncertainties

In Asia, real estate crowdfunding is mostly about presales and debts, instead of equity investment, as regulators have yet to pin down the details on how they would like to govern the fledging industry.

Mainland China had 128 crowdfunding online platforms as of the end of last year, including 32 for equity, according to a report by 01caijing, which provides broader online financial services, including data and research.

Although none of them are only targeting the real estate sector, many developers have been actively using such platforms to reach out to potential home buyers at a much earlier stage than before, as part of their efforts to reduce inventories.

Apart from that, crowdfunding can also help cut construction, marketing and sales cost while speeding up cash collection, said Shi Kancheng, chairman of Zhong An Real Estate.

Zhong An, like many other rivals, embraced the internet by testing crowdfunding in July when it put for sale online some units in a new project in Hangzhou.

“That enables us to find specified demand first and then make products,” he told the South China Morning Post.

Crowdfunding, which pools funds from a large number of investors via the internet, was acknowledged by Premier Li Keqiang last year and legalised in December. Then 10 different ministries issued a joint set of guidelines in July to define it as a public small equity investment via the internet to fund start-up firms. In August, the China Securities Regulatory Commission issued a notice to check crowdfunding activities in the country.