In the last few days and weeks of 2023, we have received numerous questions about the situation on the Berlin property market. These questions were asked in various formats: in interactive discussions at our Berlin property talks, during the Black Label Hour or in personal conversations with tenants, landlords, buyers and sellers.
In the following sections, Achim Amann will answer some of these questions and provide insights into the strategies of Black Label Immobilien and the future prospects on the property market.
Given the challenges that 2023 brought for the property industry, how do you think the industry has adapted?
"2023 was an exceptionally difficult year for all of us in the property industry. Nobody had predicted such a tough year. The challenges came from all sides: Inflation, the energy crisis, rising interest rates for construction and high construction costs. We pretty much experienced the worst-case scenario and are glad that the year is over. The changes were dramatic, particularly due to instability in energy policy and unexpected changes in legislation. Added to this were the effects of two wars, which not only cost us sales but also a lot of energy.
In the last quarter of 2023, however, we were able to get a lot of things back under control. But we had to make difficult decisions: Cut costs, reduce salaries and cut jobs - for the first time in our company's history. We focused on reducing fixed costs while increasing variable costs by paying out more commission to our brokers than in 2022. We want to reward the hard-working and incentivise them to be successful.
The market shakeout in the industry is only just beginning. We expect many companies to close in 2024 and 2025. Demographics play an important role here, as many owner-managed brokerage firms are looking for successors, of which there are only a small number. As an established company, we benefit from this. We are gaining market share and will continue to gain market share by keeping costs under control and continuing to generate sales."
"In 2023, I was very active in the media to talk about current developments on the Berlin property market. I had the pleasure of being featured in over 30 interviews. Highlights included discussions with national media such as FAZ, BILD, Spiegel, Managermagazin and Handelsblatt. I was also invited by local media such as RBB, Berliner Morgenpost and Tagesspiegel.
I am particularly proud of our own YouTube formatsespecially the 'Berlin property talks' from Black Label Immobilien. We reached a significant milestone here in 2023: we cracked the 1 million viewer mark. That was an incredibly great feeling, especially because we stayed on the ball for so long. It only took us three years to achieve this success. Reaching this number of viewers confirms the relevance of and interest in our content and our expertise in the property market."
Welcome to the 49th Berlin Property Talk. The last talk for 2023. In this interview, the two managing directors of Black Label Immobilien discussed current and future trends in the property market.
"What I like about JazzRadio is its uniqueness. It's not a mainstream station, and you can feel that a lot of things are still done by hand - not everything is slick and stylish, which gives the station a special charm. JazzRadio is the only station in Berlin that is not dominated by large networks such as RTL or ARD. That alone speaks volumes about the diversity we should be defending in Berlin.
I think it's important to maintain more diversity and looseness in the city and to gain new ones, away from the overly smooth and stylish norm, towards more authenticity and naturalness. (We also rewrote our claim at the beginning of 2023: More vision, more service, more character). Especially when we were still a small start-up without much money, we benefited enormously from JazzRadio. Even today, the station enables many small companies in Berlin to create affordable advertising. This is hugely important for reputation and ultimately success, especially for smaller companies. Just try advertising on RTL or ARD - it's not that easy. JazzRadio is practically the only radio station that offers normal entrepreneurs this opportunity.
With my 'Property Minute', I want to give over 300,000 listeners the chance to find out something about the property industry from a practical perspective, in contrast to the 90% theory that you usually read and hear. What other estate agent reports directly on the market in the media? That's exactly my role there. The format has been running for over four years now and the popularity we receive confirms our approach."
What experience are you gaining in your role as Deputy Chairman of IVD Berlin-Brandenburg?
"In my role as Deputy Chairman of the IVD Berlin-Brandenburg I gained valuable insights into the lobbying and association work. The IVD is an excellent platform for property practitioners. I am not only learning how to organise lobbying work effectively, but also what responsibility we bear as representatives of estate agents and property managers. With over 600 companies belonging to the association in Berlin and Brandenburg, the IVD unites thousands of jobs and an enormous amount of expertise.
I particularly appreciate the opportunity to get to know the perspectives of colleagues from different submarkets. The exchange on specific topics from everyday life in the property sector is very enriching for me. These experiences and the networking opportunities are invaluable.
This role is very important for Black Label Immobilien. Through our involvement in the association, we receive significantly more attention and are perceived more strongly as an important market player. This leads to greater trust among our customers and partners, which is crucial in our role as a fair estate agent."
"The project with Team Berlin KellerWilliams is a fantastic opportunity for us that fits perfectly with our goals. KellerWilliams, as the largest estate agent in the world, has grown impressively since it was founded in 1983 - and is still family owned. Their philosophy, 'All power to the agents, none to the management', is exactly what the property industry needs. It's about reducing bureaucracy and focussing on the people who actually work in the field.
When I founded Black Label Properties (BLP), I learnt many aspects from KellerWilliams. Over the last few years, I realised that I needed to build middle management into BLP in order to continue to grow. At that very moment, I received an enquiry from Texas asking if I would like to open the first market centre here with the KW founders in Germany, Swen and Christian. I didn't hesitate for long.
BLP benefits enormously as a so-called 'mega agent'. Firstly, there are no additional costs. Secondly, there are many new agents who exchange clients and properties together. This leads to more sales, a stronger team spirit and more transparency for buyers and sellers. A KW agent can achieve much more for his clients through the Market Centre than he could under rigid structures and management guidelines.
This culture of community business will completely revolutionise the German property market in the coming years. We need more innovation in the service sector, more service for the customer and more entrepreneurial spirit instead of bureaucracy. This is exactly what we bring to our work with this US spirit. With us, the work really pays off."
Can you tell us more about the 'Property Talks' and the newly established 'Black Label Hour' for English-speaking customers?
"Yes, with pleasure. The 'Property talks', where we invite experts from the property sector such as notaries, lawyers, energy consultants and mortgage specialists, are a core component of our communication strategy. These talks offer us and our audience the opportunity to make direct contact with the experts and receive practical answers. This not only raises our profile, but also builds trust in us as a broker.
As far as the 'Black Label Hour' is concerned, we developed this specifically for our English-speaking audience. We noticed that during the bilingual broadcasts of Berlin Property Talks, many English-speaking customers asked questions on topics that were not directly part of the programme. As there are a large number of people in Berlin who do not speak German but are still interested in the property market, it was a logical step for us to create a format specifically for this target group. The 'Black Label Hour' is entirely hosted by two professionals from the property and real estate industry. AdministrationInga and Christiane, who both speak perfect English. The pilot of this programme was a great success, with over 50 participants registered for the first broadcast."
How have the structures and focal points at Black Label Immobilien changed in 2023, particularly in the areas of social media and personnel management?
"In 2023, we made significant changes at Black Label Immobilien, especially in our social media strategies and our human resources management. We have completely reorganised our social media team to focus more on video content, home stories and educational content. This content provides an authentic insight into the property world and allows us to build a stronger connection with our target audience.
In terms of personnel management, we have organised our structures more efficiently. We are now a smaller team, but this makes us much more effective in our actions. We are focussing in particular on our network brokers and the expansion of our international customer relationships. This reorganisation enables us to react more agilely to market changes and serve the needs of our customers even better."
How would you rate the performance and development of your employees and agents at Black Label Immobilien in 2023, particularly in terms of teamwork, marketing and personal development?
"In 2023, I was particularly proud of the performance and development of our employees and agents at Black Label Immobilien. The way the team has stuck together has been impressive. It reminds me of coaching a group of sports stars - each agent is a strong personality and that is essential to their success. We see ourselves as partners and not just as recipients of instructions. We work together as partners and make all the big decisions as a team.
A particular highlight was the development of our marketing team, which despite its small size - there are only three of us - has made our work enormously more efficient with new approaches and the use of AI. As far as personal development is concerned, in addition to the usual broker training courses, we have placed particular emphasis on ensuring that each individual continues to develop and reflect on their personal why."
Should I buy now? Will it be more expensive again in 2024? When is the right time to buy a property? Should you buy now? Are prices still falling?
What was the property supply and demand for black label properties in 2023, especially in terms of brokered properties?
"With regard to our property portfolio in 2023, we at Black Label Immobilien had access to over 750 properties, of which we had more than 350 directly for sale. We successfully brokered 82 properties.
The greatest demand was for small, affordable 3-bedroom flats and 1-bedroom flats. In the Luxury segment It should be noted that genuine luxury is always in demand. However, we have observed that there is less demand for standardised premium properties that hardly differ from one another. In this segment, it is crucial to offer genuine, distinctive luxury."
How do you see the prospects for 2024?
"If you look at the prospects for 2024, they are clearly reflected in the my assessments recently expressed in the BILD reflected. The overall situation for house builders is improving significantly. We are seeing a record fall in residential property prices - by 10.2 per cent compared to the same quarter last year. At the same time, construction interest rates are falling, making purchases more attractive. In October, interest rates for a ten-year mortgage were still at 4.20 per cent, whereas they are now only 3.17 per cent.
For tenants, on the other hand, I see no hope of falling prices. Existing rents generally never go down again. The current fall in property prices appears to be a short-term correction and I expect prices to stabilise at this level or rise again soon. The reason for this is the expected tighter supply in the coming year. With little new construction and an increasing number of people looking for a home, the current price/interest rate constellation will probably lead to increased buying activity.
As a result, home seekers are faced with a choice: either join the queue of tenants or take the opportunity to buy, even if this means compromising on the size and location of the property. At Black Label Immobilien, we believe we are well positioned to support and advise our clients in this dynamic market environment."
If you have any further questions, please do not hesitate to contact me. Your concerns are important to me and I will be happy to provide you with all the information you need. I look forward to hearing from you.
