The Canadian housing market reached record highs in 2020, fuelled by real estate technology solutions that kept clients safe during the COVID-19 pandemic. With another record-setting year predicted for 2021 by the Canadian Real Estate Association, realtors and home buyers alike are wondering which trends will become mainstays in the industry.
Real estate agencies faced new challenges during the global pandemic, like having to implement real estate agency software that allowed them to work with clients remotely. To help real estate professionals understand the benefits of commercial property technology (also known as proptech), Capterra conducted a survey of over 1,000 Canadians who have bought or sold property within the last two years. Scroll to the end of this article for a full methodology.
What is driving the real estate market in Canada?
Understanding the forces that have been driving the demand for property in Canada can clue realtors in on how to keep up. Houses were highest in demand amongst survey takers (39%). Condominiums were the second most popular purchase (16%), followed by pre-construction houses (5%). 25% of respondents also sold homes, though the flow of supply was lower than the demand.
The demographics of the real estate market amongst respondents indicate that younger generations are behind the majority of activity:
- 39% were aged 23 to 35
- 31% were aged 36 to 55
- 22% were aged 18 to 22
- Only 9% were aged 56 and over
According to survey data, the income levels of home buyers and sellers were varied, suggesting that the housing market has accessible options for people of all income levels. Although matching a range of home buyers with properties in their price range can be a tough task, many real estate CRM software have client/property matching features that remove the guesswork.
Urban migration trends continue
Canada is continuing its trend of urbanization, as reported by the 5% of home buyers surveyed who moved to urban areas within the last two years. Medium-sized cities also saw a 2% jump in population by respondents, while small towns and rural areas saw drops of 4% and 3%, respectively.
Young people between 18 and 22 years old mainly moved to medium-sized cities, while most older respondents preferred to buy property in urban areas. Home buyers were mainly looking for more space when shopping for a new property. 15% of Canadian respondents bought property because they felt it was the right time to buy, and 12% of respondents wanted to make an investment. 11% of respondents were motivated to buy because they wanted to stop renting, while another 11% wanted to find a better community to live in.
Home buyers who use realtors are happier with their purchases
Not all those interested in the housing market want to use a real estate agent to navigate it. However, 86% of Canadian respondents to the survey did use a real estate agent – which likely influenced their overall satisfaction with their purchase or sale. 54% of those who used a real estate agent to buy a home report being very satisfied with their purchase, while only 29% of respondents who used a lawyer or notary felt the same level of satisfaction.
Real estate agency clients could be happier with the end result for many reasons, including getting better housing prices with the aid of a professional. 38% of home buyers who forewent a real estate agent paid the original listing price for their house, while only 24% of real estate clients did the same. Having a real estate agent to help proctor negotiations can lead to better property deals as well as higher satisfaction.
55% of home buying respondents also said their experience was easy with the help of a realtor. Only 40% of buyers who used a notary or lawyer felt the process was easy. Enlisting the help of a real estate agent gives clients access to expert knowledge as well as real estate technology, making the process easier for consumers.
Almost half of those without realtors unaware of FTHBI
The First-Time Home Buyer Incentive (FTHBI) was introduced in 2019 by the government of Canada to help Canadian citizens purchase their first homes. People of all ages can apply to receive reduced mortgage payments, but only if they know of the program’s existence. Almost half of home buyers who did not use a realtor (43%) have never heard of the FTHBI, effectively disqualifying them from receiving it. Only 18% of survey respondents who used a real estate agent were unaware of it.
A real estate agency’s industry expertise, paired with communication tracking offered by real estate agency CRM, leads to more informed customers; 30% of real estate agency clients received this incentive compared to only 17% of unrepresented home buyers.
Two-thirds of home buyers who use electronic documents are highly satisfied
To understand which aspects of real estate agency services led to customer satisfaction, we studied the real estate technology used. Two-thirds of real estate clients surveyed (67%) who used e-documents were satisfied with their realtor’s data handling processes. Only 8% of those who didn’t use any proptech were satisfied in this area. Paperwork is a tedious part of any process; realtors who use document management software can make their job easier and their clients happier.
According to the recent home buyers of our survey, e-documents can also lead to an easier customer experience overall. Respondents who used electronic documents, mobile real estate applications, and SMS communications were most likely to report an easy customer experience. 69% of those who used SMS communication rated their experience as easy, followed by 60% of those who used e-documents and 50% of respondents who used a mobile app. Only 6% of survey takers who used no real estate technology rated their experience as easy.
20% of home buyers only took a virtual tour before purchasing
Real estate technology does more than make the customer experience easier. Proptech can also help sell houses. 20% of home buyers surveyed visited their property solely via virtual tour before buying. Virtual tours can be live or pre-recorded or staged using a 360° camera, which can give some buyers enough of a feeling for the property to sign the contract.
While the majority of respondents (45%) did both a virtual tour and a physical visit before purchasing, virtual tour software does seem to be influencing buying trends. Virtual tours – which 65% of real estate clients report being offered – have been rising in popularity since the onset of the COVID-19 pandemic. Despite the departure of social distancing requirements, 35% of those surveyed said that virtual tours are a crucial option when choosing a realtor.
Real estate agencies may have adapted their processes to accommodate the global pandemic, but the benefits of proptech show these tech trends are likely here to stay. As more tech-minded young people look to buy and satisfaction with tools rises, real estate software is set to continue to help Canada’s housing market break records. In our second article of the series, we will go deeper into consumer opinions about the use of real estate technology and their comfort levels with innovative proptech and data privacy.
Data for the Capterra Real Estate Market Trends Survey study was collected in June to July 2021 from an online survey of 1,018 respondents that live in Canada.
The criteria for participants to be selected are:
- Canadian resident
- Over 18 years of age
- Bought or sold property within the last two years