The housing market in Canada continues to set monthly records in a booming year for the industry. Although record-high numbers of monthly transactions are still being recorded, home sales have been slowly decreasing since March 2021. As housing prices continue to rise across Canada, real estate agencies seek to understand the data privacy and technology concerns that could be discouraging potential home buyers and sellers.
To understand the challenges facing interested home buyers, Capterra surveyed more than 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). In the first article of the series, we expounded the statistics and demographics that have driven the housing market in Canada over the last two years. To follow up in our second article, we will explore the issues around data privacy and consumer concerns surrounding real estate technology.
The majority of real estate clients are concerned about the safety of their data
Customer relationships are tantamount to real estate agencies. The personalized service of real estate agents often creates trust between clients and agents. However, as new technologies are incorporated into client-agent relationships, trust levels seem to be affected.
Property sales require highly personal details to be collected such as tax information, registered addresses, and financial records. Using a real estate agency to facilitate the sale or purchase of a property means putting your personal documents in their hands, thus putting your data at risk of being mishandled. When asked about their opinions on the data protection habits of real estate agencies, 67% of respondents to the survey expressed concern.
Consumer concerns regarding cyber threats are understandable considering the data breaches that have occurred in the housing market in Canada’s past. Toronto-based commercial real estate company Colliers International Group experienced a cyberattack in 2020 in which hackers copied files from their internal infrastructure, potentially exposing client information. Despite the possibility of data theft, 31% of Canadian respondents felt unconcerned about sharing data with realtors, while 2% knew nothing about data protection in general.
41% of Canadians send personal documents via email
Although many Canadians report being worried about the data they share with realtors, they may not be aware of which data-sharing practices are insecure. 41% of respondents said they shared personal documents with their realtors via email, a medium that is vulnerable to phishing attacks. Scammers can solicit private and financial information from clients or even agents of real estate companies via email by disguising their identity and tricking recipients.
Cybersecurity software can be used to protect personal data from email security threats, blocking phishing emails from reaching the real estate agency’s inbox. It can also be used to detect malware and bot attacks in other areas where the data collected by agents is stored.
According to our survey, real estate clients shared data using more than one platform:
- 18% used real estate software
- 18% shared documents in person
- 17% used the real estate agency’s website
Transmitting personal information via software or a website could also be risky if the agency is not using endpoint protection software. Providing documents in person may seem like a safer option for sharing data. However, most data is entered into some digital database by real estate agencies at some point, which will also need to be secured by endpoint software solutions.
Over half of users who send data via an agency website are worried about data sharing
Using technology to share data seems to worry users in general, as they may be unaware of whether their real estate agency has data protections in place or not. 53% of respondents sharing data via mobile apps felt concerned about their data’s safety, while 43% of users sharing data via email felt the same.
Sharing data electronically has become an easy and popular way to conduct business, especially since the onset of the COVID-19 pandemic. To reinforce trust regarding consumer data protection, real estate agencies can obtain a CyberSecure Canada Certification from the Canadian government, which reassures clients that their data is safe. Despite the easy-to-follow best practices of cyber defense offered by CyberSecure Canada, over half (57%) of those who communicated with their realtor via a website are worried about the safety of their data.
Fewer users who shared their data in more traditional ways, such as in-person or via phone call, reported feeling worried about possible data hacks. Only 33% of respondents using each of these communication methods were concerned about sharing their data with realtors, suggesting clients feel more comfortable with familiar communication methods. Perhaps employing technology that specifically facilitates safe data sharing – such as virtual data rooms – could increase consumer trust.
65% of home buyers are offered virtual tours
Digital data sharing processes aren’t the only aspects of the housing market in Canada to raise the question of safety. Virtual tours, or video viewings of a property for sale, have been rising in popularity due to their convenience and increased safety amidst the COVID-19 pandemic. These tours can be facilitated in a number of ways, including using virtual tour software, but they all share the common benefit of reducing person-to-person contact during a public health crisis.
During the past two years, 65% of survey respondents report being offered a virtual tour by their real estate agency. Agencies providing the option of a virtual tour to the majority of respondents may have influenced the frequency of their in-person meetings. Only 19% met with their real estate agents often in person since the arrival of COVID-19.
Virtual tours give clients a 360° view of for-sale properties without needing to be physically present, helping them reduce unnecessary in-person meetings for less-than-ideal properties. 37% of Canadians surveyed met their agents more than once, while 25% met in person only one time. 10% of home buyers surveyed did not meet their realtors in person at all, suggesting real estate technology played a small part in keeping Canadian property hunters safe from the spread of COVID-19.
One in five Canadians are uninterested in virtual tours due to privacy fears
Despite the high availability of virtual tour (VT) options, the majority of real estate clients (42%) with this option preferred to do property viewings in person. When asked for the reasons behind this preference, nearly one-fifth (19%) of survey respondents cited feeling concerned about the security of this technology in protecting their personal data.
The risk of exposing personal information during a virtual tour as a home buyer is low, as private data is not normally exchanged via virtual tour software. Home sellers, however, could potentially be at risk of data breaches during virtual tours. Sellers should be vigilant about hiding personal information when staging a tour of their property, as UK property platform Rightmove showed when it revealed a client’s financial paperwork via virtual tour.
Other client concerns regarding virtual tours include properties not being showcased accurately (31%) and fear of technical problems (10%). However, virtual tour software may not be to blame for all of these issues. Using low-quality cameras or capturing rooms from bad angles can cause lackluster virtual tours for property seekers, and not all virtual tour software is created equal. Some products offer virtual reality staging, an innovative VT software that allows viewers to zoom in on, interact with, and even model aspects of the property to their liking.
As the real estate market in Canada begins to cool after reaching historic highs, the real estate technology that is partially responsible for the rapid rise in activity will remain. Familiarizing clients with these technologies will innovate the way real estate sales are conducted, helping them become the new normal for the real estate industry.
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