Investor perspectives on property crowdfunding: evidence from Australia

Abstract

Purpose

The purpose of this study is to investigate the perceptions of property investors of the risks and returns associated with property crowdfunding as an investment vehicle. The study contributes to the understanding of alternative property investment vehicles and how it is perceived by investors.

Design/methodology/approach

The study focusses on investor perceptions in using property crowdfunding as an investment vehicle and follows a survey-based design. A questionnaire was finalised after the completion of a pilot study and was distributed to existing property crowdfunding investors via email. Inferential statistical measures were used.

Findings

The results show, to an extent, similarities to general equity-based crowdfunding studies. However, the uniqueness of property crowdfunding as an investment vehicle may explain the insignificance of the results when related to other studies. Overall, the property crowdfunding investor seems to present cautious behaviour with a conservative perception of property crowdfunding as an investment vehicle.

Practical implications

It is recommended that property crowdfunding platforms present prospective investors with more formal regulation of the property crowdfunding industry. Such a regulatory framework may lessen the current level of uncertainty presented by investors.

Originality/value

The study enhances the understanding of the role of property crowdfunding as an alternative investment vehicle in Australia. More importantly, it went some way towards enhancing the understanding of how investors perceive and behave vis-à-vis property crowdfunding as an investment vehicle.

Citation

Lowies, B., Viljoen, C. and McGreal, S. (2017), "Investor perspectives on property crowdfunding: evidence from Australia", Journal of Financial Management of Property and Construction, Vol. 22 No. 3, pp. 303-321. https://doi.org/10.1108/JFMPC-12-2016-0055