What we know today to be traditional real estate in Canada is almost as old as the country itself.
The very first real estate board was set up in 1888 in the growing community of Vancouver. Over the next 100 years regulations and associations were formed to assist consumers to purchase or sell property.
Little industry change occurred from the homeowner’s perspective until a combination of two things happened – Canadian home prices ballooned by 400% (while agent fees remained the same) and the internet became universally adopted in the last 25 years.
What does the residential real estate picture look like for the next 20 years?
Information Availability from Human to Digital
In Canada, homes in the 90’s and for decades before were marketed by listing agents to buyer agents using signage, phone calls and faxes. This was valuable to buyers and sellers given limitations of the technology of its time, ultimately creating an analog “human network” to drive awareness about opportunities to buy or sell your property.
In the 2000’s, the online search-ability of home pictures, videos, specifications, pricing and location forever changed the residential market. This online information created convenience for consumers that was previously only available by hiring an agent with local knowledge, or by driving around a neighborhood looking for signs.
The availability of property information fundamentally and forever changed the relationship between agents and their customers.
Emergence of Online Marketplaces in other Industries
The internet boom in the late 90’s drove the emergence of transportation, retail, consumer goods, hospitality, and auto online marketplaces. Disintermediation of human intervention meant highly repetitive tasks and analog processes were replaced by simple, convenient online experiences resulting in significant time and money savings. As a result, buying and selling online has not only become the preferred method for most consumers but it has also become second nature.
The evolution of Canadian banking and real estate regulations have trailed behind other first world countries and made it more difficult to innovate and provide more convenient options for consumers.
So, what is coming next? How will these advancements impact real estate transactions?
Canadian regulations opening our banking data to authorized 3rd parties will provide for the capability to instantaneously lend money to consumers with all required information simply available as part of your online profile. This will replace what currently requires a mountain of documents, meetings, and credit checks typically taking weeks of duration. It will also make affordability much more transparent to the borrower.
Instant Large Sum Money Transfers
As it currently stands, sending money in Canada is still done by a certified cheque or a wire with unpredictable schedules and high fees. With “Real Time Rails” standard expected to be introduced in 2022, home deposits and transfers will become instantaneous. This will simplify time sensitive negotiations and purchasing and reduce significant homeowner anxiety.
Home Capacity Tracking
Home digitization through Internet of Things (IoT) will track important components of your home for building, renovation, and maintenance purposes. It will also provide the capability to instantly transfer this information to a new owner reducing or eliminating the need for property inspections. Better maintained or more efficient homes should become valued higher than other comparable homes.
“Smart Contracts” provide a buyer and seller of a property the capability to instantaneously transact a property by simultaneously confirming funds and ownership rights are available.
With the combination of instant lending, instant money transfers and fully digitized home records, properties can be negotiated, paid for and possessed in a single day!
Millennial buyers now make up almost 50% of the Canadian market and we live our lives differently than Baby Boomers, in two important and very relevant ways; we settle down later and we travel more. With home swapping capabilities emerging, owning your home will have increasing international lifestyle value. This will also lead to the desire to transact more often as the home will be thought of more as part of an asset pool than a permanent residence.
In a study conducted by Zillow in 2020, 47% of Canadians would prefer to sell their home with little or no expert assistance yet historically only 10% do.
Translated? The industry hasn’t provided a modern experience that empowers homeowners with transparency and control. Industry transformation typically does not come from within- Yellow Pages did not invent Google and CNN did not create Facebook. It takes a fresh perspective on customer pain and in turn and understanding of value.
Founded by a team largely formed of leaders from industries outside of real estate, the Bōde marketplace, which recently launched in Greater Vancouver, empowers Canadians with a modernized and familiar online experience. As technical underpinnings, bank policies and regulations catch up- convenience, time and cost savings will become even more emphatic.
Robert Price is a founder and the CEO of Bōde, an online real estate marketplace that launched in Alberta in 2019 and recently expanded to Greater Vancouver.