Homes have always been one of the most valuable personal assets, something that has become even more clear over the last two years of the COVID-19 pandemic. Many Canadians’ need to work from home spurred those in smaller apartments and condos to find and purchase a large space.
The Canadian housing market has never been hotter, but challenges from inventory to pandemic-related roadblocks continue to create barriers to homeownership. With problems come an opportunity for solutions—and we’re seeing the rise of a new generation of property tech—or proptech—solutions to address these challenges.
What’s proptech, you might ask? Like healthtech and fintech, proptech is any system designed to make real estate more efficient and find cost savings for everyone involved.
Innovative proptech solutions are empowering and protecting consumers, property owners, and building operators as we enter another potentially chaotic year for Canadian real estate.
Three property tech trends to watch for in 2022
Giving home buyers and owners more options
A perfect storm of low housing inventory and increased demand has driven prices from Vancouver to Halifax. It doesn’t matter if you’re talking townhomes, semis, or fully detached homes. The Canadian real estate market has seen price increases across the board, with the average house price hitting an all-time high of $720,850 in November 2021.
Many first-time homebuyers find it difficult to enter the housing market as prices continue to increase. One solution for these new home buyers is a modern take on rent-to-own, from Toronto-based Key, called co-ownership.
According to Key, it would take 27 years for a first-time Canadian urban home buyer to save a 20% down payment. With Key’s co-ownership model, a home buyer puts down a 2.5% investment on a unit, which they say is around $15,000 for most of the units they offer. A small portion of the monthly payment is put towards equity in the unit, with the remainder going towards maintenance, taxes, and fees.
When the home buyer is ready to sell, they can use that equity towards the purchase of a home or condo. Or, if the home buyer wants to buy their unit outright, they’re able to take out a traditional mortgage after three years.
Enjoy that home away from home
For homeowners looking to add a second property to their portfolio, Pacaso offers a co-ownership platform that provides search, purchasing, and management functionality for properties in the U.S. and Spain.
Instead of a timeshare—and those hour-long presentations—Pacaso provides fractional second homeownership. With Pacaso, you’re not buying time at a property. You purchase a portion of the property itself through multi-member LLCs. You’re able to use a mobile app to book time in your second home with as little as two days’ notice, all without the headaches of legacy timeshare booking requirements and systems.
Co-ownership isn’t the only innovation making home purchases easier. The advent of blockchain technology brings a new wave of investment opportunities to real estate. Blockchains are a digital ledger of transactions stored publicly on multiple servers. While the primary use of blockchains has been for cryptocurrencies like Bitcoin, the technology is being used by proptech innovators in residential and commercial real estate.
Digital tokens can be created for a property to allow multiple owners or investors to purchase. One of the significant advantages of tokenization is buying and selling a property. Traditional real estate purchases involve lawyers, fees, and reviews. When a property is tokenized, the token owner now has a much more liquid asset to sell without going through the standard real estate transaction process.
Buy, move, then sell
Finding the perfect new home is an exciting moment—until you remember that you still have to sell your current one. Proptech startup Properly is trying to remedy this with Sales Assurance. Homebuyers sign up with Properly and provide details on the current finances and property. Once qualified, Properly provides Sales Assurance that enables the home buyer to have the equity needed to acquire financing for a new property.
Properly also connects the home buyer with experienced real estate agents to find a new home. When the home buyer finds that perfect new place and purchases it, they’re able to move in without having to sell their current property.
Properly then stages and lists your previous home to ensure you get the best market price. It’s a no-muss, no-fuss solution for a constantly changing real estate market.
Tour tech for physical distant viewings
Smartphone photos and videos don’t cut it anymore when showing off a property. Homebuyers want to experience a property, and there are several proptech solutions to help with this problem.
Staging has come a long way since painting walls white and putting up generic artwork. Today’s digital staging solutions enable real estate agents to create a personalized staging experience for each potential home buyer.
Considering personal taste and preferences, the real estate agent can show how furniture, appliances, and decor would look like in real life inside a virtual experience. If the home buyer has a family heirloom item such as a piano or dining room table, they’re able to see how it would work in a potential new space.
It’s a 3D world
Take the digital experience to the next level with proptech software company CloudPano’s solution. Their software powers the creation of 360-degree virtual tours of a property. The tours can be created using any off-the-shelf 360-degree camera or the CloudPano mobile app.
Once the photos are captured, they can be uploaded to CloudPano and easily stitched together to create the virtual tour. Real estate agents (or even the home seller) can publish the tour for potential home buyers.
SmartPixel’s solution combines virtual tours and video messaging for sales professionals. Whether the client is in town or a province away, the salesperson can provide a virtual tour while being face-to-face over a video call.
One of the major pain points of condos for both sellers and buyers is finding information on unit size, layout, and features. Blackline brings all this information into a straightforward app to provide everything needed to answer almost any question about a property.
Speeding purchases and enhancing the transaction
Blockchain and tokenization aren’t the only innovations speeding up real estate transactions.
A whole new realm
REALM™ is a new MLS platform designed for realtors to simplify market and property research and improve client communication. Launched last summer, REALM leverages our GeoWarehouse® and Land Registry data to give real estate agents the tools they need to be market experts.
In our current seller market, scheduling viewings effectively is critical. BrokerBay provides solutions for call answering, showing management, and a detailed analytics system. The system is used by real estate brokerages, boards, and associations to reduce the workload associated with showing properties and closing deals.
Expediting the closing process and putting clients first is the goal of the digital payout solution SureFund™. Buying a home can involve multiple trips to banks and lawyers. With SureFund, real estate lawyers can manage the payouts from one location. The system manages payouts and disbursements and keeps all payment and payee details in one centralized system.