Almost every industry in Canada has been impacted by the global pandemic, and the real estate sector is no exception.
Perhaps not surprising, then, is how the pandemic has changed the buying and selling experience.
The Real Estate Council of Ontario (RECO) says this varies brokerage by brokerage. But both parties — buyers and sellers — can anticipate an increased reliance on technology and digital media tools throughout the process.
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This could include video conferencing calls, viewing homes via virtual tours or video walk-throughs, using digital documents for contracts, and electronic signatures for finalizing agreements.
“Though buyers can expect to see a property in person before buying, they should expect to do more ‘browsing’ virtually,” RECO tells Daily Hive. “This may be a trend that stays beyond the pandemic.”
Market outlook in Vancouver
Vancouver realtor Shawn Brown of The West Haven Group says the demand and supply for properties are similarly balanced to what it was before the crisis. He had several deals collapse in March, but after that, he was hit with new business.
“I’ve had my busiest month so far in April,” he says. Brown notes that this is not the case for a lot of agents; that realtors need to ensure their marketing is effective and that the price is compelling for people to take the risk and buy now.
“Realtors are particularly careful right now with how they are conducting their business because they have been deemed an essential service and they don’t want any reason to be constrained further,” he says.
Brown says several of his buyers were getting left behind at the start of the year because of how competitive the market was, but they have now been able to buy again.
Toronto real estate transactions
Jesse Farb, a broker with The Real Estate Office in Toronto, was overseas right before things broke out in North America.
“When I got back, we reacted by looking at the advice of The Real Estate Council of Ontario, and then figuring out the policies and procedures that we need to put in place for the health and safety of our team, our clients, and then the general public at large,” he says.
Farb explains that things changed quickly early on with moving to 3D virtual walkthrough tours on all his team’s listings, making sure the legal professionals they work with are operating in a safe manner using digital signings for closings, and also using wire transfers.
He stresses that every transaction is different, but some buyers are trying to enter the market now because they think they will get a better deal; in some cases, they have been right. However, a lot of sellers have been holding firm on pre-COVID pricing.
Farb thinks that when the economy starts to reopen, there will be a small boom during the warmer months as the spring market relaunches, but this could be short-lived due to the economic fallout resulting from the crisis.
Digitizing the process
Matisse Yiu, a digital marketing specialist for the Vancouver rental platform liv.rent, says buyers are relying heavily on digital tools to “shop” and narrow down their options before requesting a viewing.
“Sellers, in turn, do not want to hold open houses and want to limit visits by prospective buyers to only those who are very serious,” Yiu tells Daily Hive.
She explains that this also applies to landlords and property managers who are now doing tenant screenings before in-person viewings are even held — something she is seeing liv.rent users rely on more.
“The need for proof of income has also become an important piece of documentation during this time when evictions are currently suspended,” says Yiu. This is an element that’s included in liv.rent’s rating system for renter reliability and credibility.
As the demand and interest for short term rentals have decreased drastically in Vancouver, Yiu says it will be interesting to see how this affects monthly rental asking rates and vacancy rates, as the availability of Airbnb listings and rental prices seem to be linked.
“Currently, we have already seen a shift of short term rentals returning to the long term rental market, therefore boosting the supply of housing.”
Transitioning to technology
Michael Ninian, the founder and CEO of illusity, a virtual commerce platform for global real estate development presales, says he is seeing a much higher interest in 360 web apps solutions, consumer direct platforms, and VR.
“In general, we are seeing a higher demand for 3D marketing material such as renderings, fly-through videos for use with websites, and social media outreach campaigns,” he explains.
Ninian says developers were caught out with the forced closures of sales centres and disruptions of the traditional sales cycle. “We are now seeing developers coming on board with the idea of bringing the entire sales centre experience directly to a potential buyer using technology like AR/VR/XR, AI, and ML, among others.”
He anticipates that more real estate developers will move to direct virtual commerce platforms when the crisis is over. “Consumers of today want access to information on their terms and similar to the retail and automotive industries, consumers demand informative and convenient sales platforms to purchase products.”
For RECO, the authority states that while these are difficult times for many, real estate remains, and will continue to be, an essential service, both now and when the market shifts back into full swing.
“If we are looking for a silver lining, [the crisis] has sparked a tremendous amount of innovation and unprecedented digital adoption by both those in the industry and consumers, much of which may weave into some brokerages’ offerings permanently.”