- The proptech industry in Canada is snowballing, with 50 per cent of all startups founded in the last five years.
- Investors are looking to disrupt the traditional model and focus on providing customers with a better experience.
- Proptech’s rise has led to several changes in the industry, including the tech-enabled brokerage.
Investors, founders, and industry veterans all agree: consumers have been “Uber-ified,” and they’re demanding change in the consumer experience.
This change is reflected in the growth of proptech and the big bets being placed on the industry.
Consumers want their needs met immediately, effortlessly, and with outstanding customer service.
All companies — including real estate agents and brokerages — that understand these changing needs are taking advantage of the opportunity by throwing out last year’s methods of attracting customers — like aggressive cold calls or bragging about production numbers — and replacing them with delivering a better consumer experience.
Proptech startups in Canada on the rise
As new proptech companies have discovered, customers aren’t comparing their agents to an ad they saw on a bus or an agent with big sales numbers they read about. No, they’re judging you based on the experience you provide.
What’s followed this emphasis on consumer experience in real estate in 2022 has been a heavy investment into proptech.
Looking at a recent report from the Proptech Collective, a volunteer collective of real estate and technology professionals, it’s clear that proptech is a relatively new category for investment in Canada, but it’s exploding in recent years.
In fact, 50 per cent of all proptech startups in Canada were founded in the last five years, with 71 per cent still in the pre-seed, angel or seed funding round, according to the report.
A better consumer experience
Some of the more well-capitalized companies in the space include Renorun, a company that offers seamless ordering and delivery of materials to contractors and purports to make “building materials easy.” While Nesto, a mortgage company, claims that it offers simplicity and speed.
Souqh, a platform that houses all documents and people related to a transaction, allows the client to monitor who gets access to closing and identification documents.
It also provides a checklist of the homebuying or selling processes, prompts the user when documents need to be added, shared, and to whom, and allows for all service providers to interact on the platform to ensure that nothing is missing, documents don’t get lost, everyone is kept on time, issues are detected early.
All of this new funding and the rise of startups have led to several changes in the proptech scene affecting the real estate industry, as highlighted in the report. These changes include:
The tech-enabled brokerage
Disruptors are changing the brokerage model by enabling real estate agents to leverage technology to replace the administrative function of the brokerage.
Agents in the “tech-enabled” brokerage model will be able to manage clients, documents, appointments, processes, paperwork, and compliance with the click of a button so that they can focus on what matters most — the client experience.
Fintech (alternative financing solutions)
Fintech is really the proptech darling. It’s not just about faster financing support — which our pandemic-heated market desperately needed— but it’s also about providing creative solutions to down payments and sharing mortgage costs.
Real Estate agents will need to understand these options and partner with these solutions in order to serve their clients better.
For those representing commercial real estate landlords and tenants, understanding how physical shopping is now a hybrid of online shopping and in-person experience is a must.
Big brands already use data-driven insights to understand customer behaviour and drive in-person and online sales.
EV and germ-detecting tech
Since the environment and health concerns now hold a permanent role in our minds, real estate agents should be prepared to talk about EV charging, decarbonization and anti-germ technology.
A variety of proptech companies are popping up, aiming to ease the impact both homes and buildings have on the environment and using low-touch technology to open doors and lights to kill germs.
With the increasing focus of investors in the Canadian proptech space, as well as a strong adoption of technology across all real estate players – from consumers to brokerages to real estate agents and mortgage providers, 2023 will likely bring a strong change in how we all work together.
Natalka Falcomer is a lawyer, real estate broker and Certified Leasing Officer who started her real estate career in private equity. She created, hosted and co-produced a popular legal call-in show on Rogers TV and founded and recently sold Groundworks, a firm specializing in commercial leasing law. She is currently the Chief Real Estate Officer of OJO Home Canada, leading the development and expansion of the company’s personalized home buying and selling experience for the Canadian market. She sits as a board member on The Ontario Trillium Foundation and as an advisor on NAR REACH Canada.