Technology has had a huge impact on the Canadian real estate industry over the past year and has taken digital transformation and innovation to new heights.
However, despite the strides forward, many more hurdles and opportunities lie ahead, which is why technology will be integral to the ongoing innovation within the industry.
As we close out 2021 and look ahead to 2022, it’s important to think about the trends we’ve witnessed over the past year and the types of technologies that have been integral to the success of the industry – in both residential and commercial real estate.
Keeping a close eye on these trends will help inform what technologies are likely to drive the next wave of digital transformation in 2022 and beyond.
Reflecting on 2021: residential trends
The pandemic spurred a wave of innovative solutions, many of which have now become the new normal in the residential real estate space, such as virtual viewings and signings.
While these remote processes were initially implemented to help real estate professionals and those they serve manage through the pandemic, they proved to be incredibly useful and valuable.
Now, based on key learnings from the past year, many of these solutions are being leveraged to simplify other processes within the residential space.
For example, virtual viewings and signings are now helping Canadians purchase properties located in other cities, provinces or even countries. This speaks to a larger trend within the industry: that the way people do business has changed entirely, which comes with both benefits and risks.
In recent months, we’ve seen how much of an impact interest rates can have as they played a key role in the flurry of activity in the residential market.
In this low-rate environment, many Canadians are trying to get into the market before interest rates go up, even though rates had already impacted activity throughout the pandemic.
Data and technology are vital to predicting these types of trends, along with other housing-related trends, which can help inform the decisions of buyers, sellers and all the parties in between.
Technology has also directly impacted the way people work and has enabled many Canadians to shift remotely through work-from-home or hybrid models. This change has had a great impact on where people live as Canadians no longer needed to factor a commute into their day to day.
However, as more and more organizations develop plans for 2022, which include everything from remote, hybrid and in-office work arrangements, we may see further shifts in where people choose to reside.
Limitations on businesses throughout the pandemic posed many challenges – in office, personal services and retail in particular.
As restrictions lifted, pent-up demand drove up activity in some of these sectors, while others continued to search for new opportunities. And, of course, online purchasing became the norm, so demand for industrial and warehousing accelerated.
Data has also played a key role in how the industry operates, with big data and advanced analytics informing commercial real estate and sector-based trends. This data will not only simplify processes but also help keep costs down.
2022 and beyond: Changes in the residential landscape
Interest rates have the potential to change the market in 2022 and beyond.
Those who purchased a property at a time when interest rates were low may struggle to keep up with payments. Interest rates may also directly impact supply and demand in 2022 and in the years to come, as rising rates can influence affordability for many Canadians.
Additionally, technology and changing work models will continue to impact where Canadians live.
If organizations stick to long-term remote and hybrid work models, this will continue to allow employees to live further from the office, which may allow Canadians to afford larger properties in less dense – and less expensive – cities and regions.
Commercial: Changing work models
It would appear the dust has begun to settle in the commercial real estate space, with many investors returning to the market over the past few months.
This return may be for a variety of reasons, one of which is that as restrictions lift, many businesses are faced with decisions on how much real estate they will need moving forward – which is directly linked to the increased role of technology and changing work models.
While this may mean some businesses are choosing to downsize to smaller properties, it also opens up new opportunities for commercial investors or businesses looking for larger spaces, or new spaces in Canada.
In addition to its undeniable impact on how Canadians work, technology has played and will continue to play an important role in how commercial properties are vetted and presented to buyers. This may include everything from drones and 3D modelling to virtual reality.
These technologies and others also have the ability to help commercial buyers vet cross-border opportunities which will make it easier for Canadians to invest in properties across borders or in other countries.
While technology has played a key role in allowing the industry to function throughout the pandemic, challenges and uncertainty remain.
With this in mind, it will be important for all industry stakeholders to remain vigilant as change may come quickly.
A prime example of this is the recent Omicron variant, which has rapidly changed back-to-work arrangements and once again impacted the way Canadians conduct day-to-day business – meaning we are likely to rely more heavily on remote processes once again.
Paying close attention to these changes taking place, as well as the challenges and opportunities facing our industry, will inform the technologies and data needed to drive the next wave of digital transformation.
FCT and our partners will have to work together not only to prepare for a future of innovation in an ever-evolving landscape, but to also remain at the forefront of driving this innovation forward – as we have done for the last 30 years.