Over the last year, the property sector has undergone major transformations, including the acceleration of technology adoption. These changes have put a brighter spotlight on proptech startups looking to innovate in the sector.
A new report reveals details on the Canadian PropTech landscape, examining the key players, emerging trends, and insights into how the Canadian real estate industry is transforming.
Out of 300 startups surveyed, approximately 60 percent are in the early stages of their growth.
The report comes from Proptech Collective, a group of real estate professionals, technologists, and entrepreneurs, with partners including PwC, the Business Development Bank of Canada, and Alate Partners. The data in the report is based on several sources including Pitchbook, Crunchbase, Alate Partners, and interviews conducted by the Proptech Collective.
According to a 2020 report from PwC, the real estate industry was on the verge of “widespread proptech adoption” prior to the pandemic. A similar report from KPMG identified digitization as a key trend in the real estate industry.
“One of the biggest legacies of this pandemic will be the acceleration of digital transformation,” KPMG said. “The impact of digitization on asset classes such as office, retail and leisure space cannot be underestimated.”
Proptech Collective’s report also noted that COVID-19 has accelerated the adoption of technology in both the real estate and construction industries, meaning Proptech startups are playing a key role in the future of the “physical space.”
CEOs the group spoke to indicated the effects of the pandemic are here to stay, and that startups have the opportunity to simplify and digitize existing processes.
According to the study, out of 300 startups surveyed, approximately 60 percent are in the early stages of their growth. Sixty-seven percent of proptech startups in Canada were founded after 2014, and of the startups studied, 59 percent are at the pre-seed, angel, or seed stage of their growth.
The report noted that these early-stage companies are drawing capital from large investors in both Canada and the United States, including FJ Labs, which has invested in Properly and Tread. Some of the most notable Canadian proptech investors include Alate Partners, Groundbreak Ventures, and Greensoil PropTech Ventures.
Four out of five Canadian proptech startups are located in what the report called Canada’s top five hubs: Montreal, Toronto, Vancouver, Calgary and Kitchener-Waterloo. Notably, nearly half (46 percent) of all Canadian proptech companies are based in the Greater Toronto Area.
Among the most-funded proptech startups in Canada is Sonder, which has raised $698 million CAD to date, Ecobee with $203 million to date, Properly with $118 million to date, and Breather with $162 million to date, the latter notably among a certain type of proptech startups that have been negatively affected by the pandemic.
PwC’s report noted that although equity funding in proptech is projected to fall slightly to $8.4 billion USD, industry digitization has truly accelerated amid COVID-19.
Last year, Clinton Robinson, CEO of proptech startup Lane, which offers an office space communication platform and is backed by Alate Partners, told BetaKit Lane saw demand for its services double since the pandemic hit.
Proptech Collective also noted some key areas within proptech that Canadian companies are looking to innovate. These categories include building automation and IoT, with startups in these areas including ThoughtWire and BrainBox AI, and co-working space, with Breather and Flexday being notable startups.
Other notable categories include energy management (startups in this category include Parity and Ecobee) and construction tech (startups in this category include Bridgit and Indus.ai).
Real estate companies that Proptech Collective spoke to indicated there is a strong demand for analytics and platform-as-a-service as they look to keep up with the acceleration of the industry.
Venture capital investors that participated in this report noted that though the demand for tech solutions to help address issues in real estate is there, startups will require industry expertise and will need to leverage Canada’s deep talent pool in order to meet the moment.
Image source Unsplash. Photo by Tierra Mallorca.
Benefit from a booming real estate investing market with these five master classes – MarketWatch
MarketWatch has highlighted these products and services because we think readers will find them useful. This content is independent of the MarketWatch newsroom and we may receive a commission if you buy products through links in this article.
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While this is good news for young families looking to purchase their first home, it’s also good news for those looking to invest in this new real estate boom. As MarketWatch states, “the underlying need for new homes is still there, which should keep the building sector busy for some time to come.”
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All five courses are taught by Symon He, a real estate investor and business consultant based in Los Angeles. He is also a co-founder of LearnBnb, a boutique blog that specializes in the home-sharing economy.
If you’d like to dip your toe into real estate investment, now is the time, and The Real Estate Investment Master Class Bundle is the how. For a limited time price of $29, you can become a full-fledged investor and benefit from this recent surge in real estate development.
Prices subject to change.
Kamloops real estate saw average prices jump, and it doesn't look like they will fall in the near future – Kamloops News – Castanet.net
The real estate market is staying very hot, and it doesn’t appear to be trending down any time soon.
For February 2021, the Kamloops And District Real Estate Association (KADREA) reported a total of 283 residential unit sales by the Kamloops & District Multiple Listing Service (MLS). That is a 37.4 per cent increase in sales from last February.
In addition, the average price of houses went up, as did the total sales dollar volume. February saw a 65 per cent rise in total sales dollars over 2020, recording $145.8 million. 2020 was $88.3 million.
Typically, February is a slow month for Realtors, as usual trends have the market slow.
“That’s a trend I used to look at. They look at what they call the ‘seasonally adjusted average’ but because of last year with the pandemic, March until end of May things shut down,” Aaron Krausert, a Director on the Board of KADREA, told Castanet Kamloops. “So all those typical trends on the graphs I like to nerd out on, everything is out the window it seems.”
“It doesn’t matter what month it is, buyers are just jumping.”
There were 349 new listings recorded by the Kamloops MLS last month and as of March 3, there were 587 active listings in the Kamloops and district region.
And still, it doesn’t seem to be enough.
“Literally everything is selling at all time record pace. There is something called the absorption rate, which is the idea of if there were no new listings starting today, how long would it take at the current rate of sales for all the inventory to be absorbed (sold) into the market,” Krausert explained. “And right now it’s under four months.”
“That means, no new listings, everything in the market will be done in just over three months.”
Even with the construction on new builds and plots, in this sellers market, there don’t seem to be enough residences to go around, with many seeing multiple offers.
And so if you are looking to buy at this time, there are four things you absolutely need when bidding on a house.
“Buyers need a pre-approval, in writing, down payment on hand, short subject removal period and hopefully not subject to sale, because that’s not attractive in a multiple offer scenario.”
Ottawa's hot housing market becoming unaffordable for some – CTV Edmonton
There has never been a more intense housing market in Ottawa than there is today.
Prices are through the roof; which is great for sellers, but buying a house in today’s market might not be as simple as you think.
Tanya Trevors and Chris Armstrong were lucky enough to purchase their dream home just before COVID-19 hit the capital last year, but that doesn’t mean it was any easier.
“Couple hundred thousand dollars I would say, more than our budget,” says Armstrong.
Trevors adds, “Yah, we did get into a bidding war. There was one other person bidding on the house. So we did end up overpaying for the house.”
The market was just starting to heat up to what we see today. They avoided the spike, but still spent about $50,000 over asking.
“We were looking for almost a year,” says Trevors. “And we’re really happy with what we got. So my advice would be to be patient.”
Dominique Milne is a real estate broker in Ottawa. She says low interest rates, combined with the government and high tech sectors in the capital, have created a perfect storm for sky high prices in Ottawa.
“We have record low interest rates, which are certainly funnelling some fire,” says Milne. “It’s a fantastic time to sell. Everything is selling. We’re down to 16 days on market for February. We haven’t seen that ever. But for buyers, it is hard. The competition is fierce. You have to have your ducks in a row. Conditions? Forget it.”
Andrea and Scott Martin have put down nine offers on nine houses, each time being outbid by other buyers.
“We’ve been looking for almost two years,” says Andrea. “We’ve gone up to almost $170,000 over and still not gotten the house.”
Over the course of two years, prices have risen so high, the Martins say it’s near impossible to get what they were originally hoping for.
“When we started looking for houses, we were looking in a range of around $400,000, and they were nice properties,” says Scott. “And now when we look at anything of the same quality, it’s almost double the price.”
They say they are quickly running out of hope, and options.
“Eventually we’ll be priced out of the market if the prices keep going up the way they are,” says Andrea.
The pandemic has had a lot to do with people’s lifestyle change and working from home, causing a supply and demand issue. It’s changing the way people work, and what most families need during these times.
“Suddenly you have two people working at home. Two kids at home on and off. And we’ve gone from needed three bedrooms to needing five bedrooms and an extra space for people to separate from themselves,” says real estate broker Daria Kark.
Kark adds a lot of homebuyers are being squeezed out of the market by investors.
“Current rates of two per cent or so for a five-year fixed mortgage, you know, you can’t make that much on a regular investment. So people are just investing in their mortgages. They’re investing in their real estate.”
But as frustrating as it is to be a home buyer today, the Martins have not lost all hope just yet.
“We’re offering on another house tomorrow,” says Scott. “Offering over asking, no conditions. Same as every house we’ve bid on. We’ve never had a condition and it never seems to matter. So we don’t get our hopes up anymore, but we keep trying.”
The Ottawa Real Estate Board reported record sales in February.
A total of 1,390 residential properties were sold in Ottawa last month, up from 1,134 in February 2020. The average sale price for a residential-class property was $717,914, an increase of 27 per cent from a year ago. Condominiums sold for an average of $407,671, an increase of 17 per cent from February 2020.
The sales volume for residential properties and condos in Ottawa was $885,592,105 in February, 54 per cent higher than the same month last year.
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