An unusual rhythm for 2026: what should platform investors pay attention to?

This year, loans secured by real estate are growing faster than the housing market itself. Investors' desire to outpace inflation and the search for higher returns are creating conditions for more aggressive offers with riskier terms. Martynas Stankevi?ius, head of crowdfunding platform "Röntgen," suggests carefully assessing whether new market trends actually match people's risk tolerance.

Lithuania's crowdfunding sector, which grew by a third last year and approached €400 million, is not slowing down in 2026. Investors have grown accustomed to financing real estate development secured by property, earning returns several times higher than deposit rates — especially since the property securing such investments has been rising in value for nearly two decades.

However, since this spring the housing segment has entered new circumstances. Real estate sales, which had been growing for some time, began to cool due to new geopolitical conflicts, spikes in energy prices, rising Euribor again, and overall consumer sentiment. At the same time, new housing projects started earlier by developers reached the market. The returning balance of supply and demand is fundamentally healthy, but it raises legitimate questions about whether property prices can still rise further.

In this context, lenders should follow somewhat more moderate real estate market scenarios and maintain existing risk assessment criteria. Yet in the crowdfunding sector, the opposite can also be observed: undiminished investor appetite is being met with more aggressive, less well-secured offers.

Moreover, inflation exceeding 5% again is prompting people to look for investment opportunities that clearly outpace it — and some financial sector players are inclined to take advantage of this. "Safety" is a fairly abstract, not immediately visible, and hard-to-measure factor, so it's often overlooked, while the promise of higher interest, expressed as one concrete number, seems to answer exactly what people are looking for.

Finally, as the crowdfunding sector grows and new participants enter the market, competition increases — both for investors and for borrowing businesses. This can lead operators seeking new opportunities and points of differentiation to gradually take on and offer people ever-greater risks, which can become entrenched and slowly form new market standards. But are those standards actually good for the investor?

Departing from unwritten rules

For nearly a decade, certain unwritten practices dominated Lithuania's crowdfunding market, and some operators have recently begun gradually adjusting them. All these factors may come with somewhat higher interest rates — but not necessarily proportional to the new risks.

Leverage level. The most visible new trend in the market this year is more aggressive leverage, pushing the loan amount closer to the value of the pledged asset. The previously unofficial standard of a 70% loan-to-value (LTV) ratio is increasingly turning into offers with 75%, 80%, 85%, or even higher figures. As leverage increases, the value buffer meant to protect the investor from market fluctuations, recovery costs, and other unforeseen circumstances shrinks.

In exchange for a smaller value buffer, people are typically offered higher returns. But in many cases, it's worth carefully considering whether the potentially higher return today truly compensates for the additional risk being taken on.

Second-lien mortgages. Investors using these platforms in Lithuania had also grown accustomed to first-lien mortgages — that is, being first in line among creditors in case of asset recovery. Today there are noticeably more offers involving second-lien mortgages, so people should carefully check each time where they stand in line for the pledged asset. In a recovery scenario, obligations to first-lien mortgage holders are covered first, so second-lien pledges can turn into very thin ice if problems arise.

Payment terms. Another growing practice involves investment projects where all loan servicing payments, including interest, are deferred until the end of the project — usually after 12–24 months. While quarterly interest payments alone don't guarantee a successful project outcome, this practice provides more clarity about the investment's progress, the true quality of the loan, and the owner's solvency.

Interest paid quarterly also returns part of the capital earlier. It's also important that periodically paid interest prevents the loan itself from growing and its leverage ratios from worsening over time. In other words, a two-year loan issued at 60% LTV with 10% annual interest paid at maturity effectively turns into an 80% LTV loan in practice.

Projects without the developer's own funds. Among other riskier market innovations are real estate projects that promise to raise part of the construction funds from significant buyer advance payments, as well as loans for projects where the acquisition of an asset (e.g., a plot of land) is incomplete, with remaining debt owed to the seller. In both cases, the projects presented to investors have little or no developer equity, and other parties are involved with whom legal disputes could arise. In practice, all of this can significantly complicate recovery if problems occur with the project.

Foreign markets. As financing for foreign real estate development projects becomes more popular, there are now cases where a platform lacks a local credit risk management team in an unfamiliar market. While foreign-financed projects meet some people's desire to diversify geographically, every country has its own specifics, and not understanding them creates additional risks.

Related parties. Finally, there are also cases where an intermediary finances real estate developers directly or indirectly connected to itself. The Bank of Lithuania, which oversees the crowdfunding market, opposes such practices due to potential conflicts of interest, non-disclosure, and correspondingly higher risks. Yet professionals more familiar with the market still identify investment offers with possible conflicts of interest.

What should you do?

More aggressive and enthusiastic financing in a more moderate real estate market is not a "merit" of developers. With the help of intermediaries, they are simply happy to borrow capital on terms more favorable to themselves, as long as investors agree to it. That's why people must stay vigilant, examine all terms closely, and understand what they could mean in practice.

Importantly, crowdfunded real estate financing has not become a riskier instrument in itself, as long as you choose the right partner. Even in a more moderate housing market, loans secured by real estate remain a solid financial instrument — as confirmed by the continued activity of banks and credit unions lending their own capital.

Also, since platforms are essentially "programmed" to lend developers money that isn't their own, it's important today to assess each market participant's resilience to new temptations. Lithuania's crowdfunding sector has seen different approaches to the business. Some players have already ceased operations, while long-term investor trust is earned by those operators who manage to treat even other people's money "as if it were their own.