As the saying goes, the only constant in life is change. With today’s market truths and the push and pull of innovation, change, especially in the real estate space, is happening at breakneck speeds. 

The innovations we see are not just about building new widgets to help agents find more clients or close more deals. More to the point, the latest innovations are consumer facing and intended to reduce housing costs, lower barriers to entry and ultimately solve the growing housing dilemma. 

The growth of proptech 

Consider the more than two dozen proptech startups in the USA that have raised in excess of $1B (and this doesn’t even include the heavily funded ibuyer segment, or the fast growing construction tech sector). The startups run the gamut from helping consumers with the deposit to buy a house, or taking an equity position in a home, to co-living communities and innovative rental models. They have catchy names live Divvy, Perch, Common, Zerodown, Unison, Landed, Knock, Loft, Nico, and Common. Investment in the proptech segment market has grown from $725M in 2013 to in excess of $10B in 2019. 

A new way of life? 

Changing the way we live is not new to the North American way of life. A simplified history lesson would start with young cities, with low populations huddled downtown near manufacturing jobs. In the post-war era cities experienced residents escaping the downtown core for the relative luxury of the suburbs to take advantage of low cost bungalows with white picket fences. Big new roads and inexpensive automobiles made the commute fast. 

By the 70s condominium buildings started dotting the downtown landscape, offering a more carefree lifestyle. In less than twenty years, condominiums have virtually taken over as the defacto housing solution for first time buyers and investors. Today, in Toronto, there are more condo sales than freehold. Clearly, we are living in a city where the condo IS king!

The next wave is upon us. It’s a tremendous opportunity for those of us who embrace change and a potential death knell for those who choose to bury their heads in the sand. 

Shifting demographics 

The latest research shows a demographic shift to urban centres. Consider that the GTA added 350,000 jobs between 2016-2019 but only built 102,000 homes. By 2050, more than 70% of the global population will live in cities. Toronto’s population will nearly double. As Toronto approaches alpha city status, our biggest concerns will be housing people efficiently and affordably. 

High land and construction costs, as well as restrictive mortgage rules, have created a perfect storm in the real estate market. If Toronto is to prosper, we will need strategic solutions to lower pollution, cure transit, reduce commute times, conserve energy, protect our green spaces and provide more housing options. Innovative housing models, driven by technology, seem like a natural solution to the high barriers of home ownership.  

Helping people get into the market is more complicated than ever

Realtors will need to adapt at least as much as consumers. They’ll have to keep an open eye to future possibilities and recognize that helping people get into the market is no longer as simple as finding them a home to rent or buy. 

We realized very early that the growth of Key would rely on standing on the shoulders of giants. Instead of setting out to replace realtors (as so many startups are doing), we embraced them as valued partners. The fastest way to share our innovative model is to work with a network of 50,000+ people with access to hundreds of thousands of potential buyers and renters who are locked out of the real estate market simply because there has been no other alternative.

The truth is that realtors’ business is getting incredibly more competitive, which often means devoting more time and money to build future business and stay on top of past business. Realtors also have to work harder at capturing leads, that often means spending more money.

Some real estate professionals are leaning into the new solutions and adapting their business accordingly. Others are sticking to the horse and buggy and thinking that cars are just a passing fad. We know which ones we’re betting on to succeed in the future.

We also know that fewer listings have created upward pressure on real estate values which has, in turn, priced many people out of home ownership. That’s been frustrating for both clients and realtors. Finding a much needed solution is why Key was founded. By bringing consumers and institutional investors together, we’ve created a truly unique model.