Inman is interviewing industry thought leaders to find out what’s next in 2016. Here’s Roland Kampmeyer, CEO of KAMPMEYER Immobilien GmbH.
Are you optimistic about 2016?
Worldwide turbulences are certainly a challenge for every one of us. Optimism is part of the basic entrepreneurial thinking. Without losing sight of this reality, I’m optimistic about 2016 and my company.
Our focus on the economy and politics has shifted into international conflicts and threats. Energy and the environment will indeed stay in focus, which has been shown at the international climate conference and its results.
Depending on events that may take place in 2016, the focus in energy and the environment may take a step back from international security politics.
Though European countries could profit from an increase in their GDP (gross domestic product), economic globalization and technological progress, the consequences from the refugees immigration are still uncertain, and it may have an direct effect on the EU (European Union) future in its current state.
Private consumption will continue to be the economic motor. Our common challenge is to focus on entrepreneurial success even if unforeseen conditions may occur.
The housing market?
Level of return on investment in the financial market has boosted real estate investments. Those decisions will be made based on prosperous perspectives for metropolitan areas.
European cities will face some challenges, such as demographic development, supply of age-based housing for the elderly and social integration of immigrants.
The rise of population and employment in big cities will cause even higher demand for residential real estate. Ongoing growth in Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart will continue, which comes as an advantage for specialized real estate agents.
The basis for successful customer relations is fundamental and cutting-edge real estate knowledge. Success doesn’t come from specialization alone but rather from global and individual perception as the local expert.
The secret lies in thinking and acting locally within a global background. People with high-quality standards influence the market more and more, and we as real estate experts have to meet those quality requirements.
What are you worried about?
In troublesome times, political solutions are required. It has become more important to actively influence social solutions within your own social responsibility. Since challenges are changing in a much shorter period of time, entrepreneurs are asked to continually adapt to social changes and dynamic markets.
Strategic planning horizons have become shorter as well. Because short development cycles can be adjusted more frequently, long-term strategies are risky.
I try to make our specialization as a residential real estate brokerage sustainable for the future without being determinate on a specific sphere of activity. We are highly flexible and precise but are able and willing to adjust to dynamic market changes as well.
How much do you fret about global events?
The current refugee situation is disconcerting. We see the importance of it in the political focus and the amount of media coverage that it has been given.
I’m also influenced by worldwide investment of real estate corporations and financially strong enterprises into central residential areas. Big real estate players invest enormous sums in developed residential areas and even in entire quarters. It is possible that special concentrated investment will increase.
I ask myself, what would happen if companies such as Apple or Google would buy a whole area of a city? How would their urban shopping tour influence our quality of living? What consequences would the population face?
In light of the importance and dynamics of that investment behavior, we should think more about the people living in our cities.
Will mortgage rates go up or down next year?
In December 2015, the Federal Reserve left the door open regarding an interest rate increase. In 2016 a slight increase in interest is possible. Even if return on investment from residential real estate declines, real estate will remain interesting as an alternative investment.
Which market are you in?
My company was founded in 1995. KAMPMEYER specializes in selling and renting residential real estate in Cologne, Germany. My clients are private landlords, institutional investors and real estate development firms.
Will unit sales go up or down in your market?
Market dynamic will continue to stay strong. Ownership rate in Germany is low. Flexibility is much more appreciated here. Mobility strikes return on investment. Real estate transactions will stay at the same level as in 2015.
International investors will continue investing due to the large amount of cash available to them.
In Germany alone, 900,000 units (worth 191 billion euros) were sold in 2014. Real estate investment has continued to grow since 2007, and we predict that prices will continue to increase as well as investments.
Will home prices appreciate in your market next year?
Cologne is a residential market, and it will become more important in the upcoming years.
Here — as in other major German cities — prices of residential real estate have risen by 10 percent per year since 2009. This development will continue, and we will see higher prices which are mainly set by new-build properties.
Will agents be more productive next year?
Innovative customer relationship management will increase productivity; it will become more important in the future and starts on the inside. Real estate agents have to become more knowledgeable.
Therefore, we have merged the renting and selling departments. That gives us the opportunity to shift customers so they are more comfortable in their life circle without changing agents.
Technological innovations increase agents’ productivity. Last year we launched an appointment booking system. First for special newly built properties, then for our agents. Next year we will integrate this technology to the next level and use it for viewings in renting as well. Technology will enhance customer experience and boost agents’ productivity so they can focus on being with the customer rather than managing appointments.
What will be the biggest source of real estate leads next year?
Potential buyers and sellers need orientation, transparency and security in real estate markets. Dynamic markets strengthen that need. Therefore, intelligent services of information will lead to new customers or more contact to already existing customers and will be the motor of real estate leads. Intelligent services give orientation, are transparent and give customers a secure base to make a good decision.
Concentration on online listings in property portals will change step by step. Worldwide listing platforms for real estate will lose relevance to digital developments and won’t be keep up with new possibilities.
Are you making plans to expand, contract or maintain you business this year?
We will continue to expand the consultancy business. The last few years have shown that we bet on the right horse with our qualified growth.
I say — we don’t have to become more, but always have to know more. That will continue to be our motto in 2016.
What is your biggest challenge in the coming year?
Catchphrase: globalization. A buzzword that is often overused. Globalization includes the challenge to develop a better understanding of social diversity. People’s needs have to be understood across industries, borders and cultures.
Only together can the world handle complex and almost limitless links.