The Portfolio business publication interviewed Martin Monson, CEO of the Colombian real estate company FincaRaiz, which conducts its business in several markets, including Spain and the United States.
Monson spoke in detail about the plans of their platform for growth this year, described the context of the current macroeconomic situation, technologies and how this will affect the real estate markets. In an interview, the CEO of FincaRaiz also highlighted the growing popularity of the Colombian real estate market.
Achievements at the end of 2022
For FincaRaiz, like many real estate companies, 2022 turned out to be a very successful year. The company was able to make great progress in a variety of projects, despite economic problems, including those related to the energy and building materials markets. Following the established trends and the corresponding demand in the construction sector, the company has implemented many modern technologies in its work.
FincaRaiz has also achieved double-digit growth over the past year. Like other emerging market companies, including Colombia, the company was able to increase its operating margin by 3 points by 2021. Monson looks forward to the upcoming development of the market with sufficient optimism.
Problems in the past year and the goal for the current year
The main problem for the global real estate market in 2022 was record inflation and rising interest rates on lending. The situation was the same in all the largest real estate markets in the world.
Using the example of Colombia, Monson points out that in just 12 months from 2021, mortgage loans with a fixed rate of 8% have almost disappeared from the market. Today, such options are offered only at 16%. A similar situation is observed in Spain and the United States. Fixed-rate offers either disappear altogether, or only the least profitable options remain.
Monson, however, points out that this situation is transitive and will not remain on the market for a long time. In fact, floating-rate mortgages have started to gain popularity in many markets in recent months. Also, many experts expect that inflation may begin to slow down in the not-so-distant future and the policy of central banks of different countries, in accordance with this, will soften.
Expectations for the end of 2023
Monson looks positively at both the development of his company this year and the development of real estate markets in general. The year has a lot of chances to become even better than 2022. We should definitely expect an increase in the supply of new real estate to the markets. This can be expected in Colombia, Spain, the UAE, Singapore and many other major real estate markets in the world. Sales will also grow. In Colombia, as an emerging market, up to 250,000 homes are expected to be sold by the end of the year, which will be a 7% increase compared to 2022.
FincaRaiz has already completed a 24-month project to promote the brand and technology. $1.2 million was invested in this. About half a million dollars were spent on marketing. Most real estate companies are now increasing their investments in promotion on national and international markets.
Recently, FincaRaiz launched a new "self-service" product, where anyone can post information about their offers on the company's portal using simple and intuitive user-friendly tools. The company tries to follow the current trends in customer orientation, decentralization, transparency and accessibility.