Writers note: I am a dual Canadian/American citizen. My work and life is split between the two countries, but I have lived in Canada almost all of my adult life, and I am proud to call it the home of my heart. I am writing this for both Americans and Canadians, so bear with me if some of this seems obvious or repetitive.
This week, I attended the OREA REALiTY 2020 event in Niagara Falls, hosted by the Ontario Real Estate Association. Canada doesn’t typically see these types of events. There are some provincial association events, some brand events, and a few events put on by various other local boards. But this event was different. OREA’s goal with REALiTY was to create “Canada’s most forward thinking real estate conference,” and in my opinion, they succeeded.
Ontario is the most populous province in Canada, home to some 14.5m people, representing almost 40% of the country’s total population. It’s also home to Toronto, a city of over 3m, and the 5th largest city in North America. For my American friends who may need to check a map, Ontario borders Michigan to the north and east, extends west to nearly the entire northern border of Minnesota, and extends east over the entire northern border of New York state. For perspective, it’s slightly less than twice the size of Texas.
In Ontario, there is one realtor for every 123 adults.
The overall theme of the event was technology, the future, and the current landscape of the industry in the US. Usually, Canadians are defensive about the US. We don’t like being called “the 51st state” or “America’s hat” – and we really don’t like thinking that just because something happens in the US that it can, should, or will happen in Canada. (Even if that’s often true.)
In my experience, American start-ups, tech companies, and speakers usually come into Canada without doing their Canadian homework, thinking they can use the same examples, share the same stats, and tell the same jokes that they use in the US. (Note to US speakers: skip the gun jokes and stop with the “I don’t know what y’all do up here, but in the US we do this….”) This event was, for the most part, refreshingly relevant. Despite there being many American keynote speakers, there were plenty of Canadian stats, examples, and inside jokes. Seth Godin even opened with one of the most charmingly Canadian stories I have ever heard on stage.
In the past, messaging about the US at events in Canada has often been along the lines of “beware, this is coming, watch out, you are doomed, etc.” We’ve heard this for years about listing syndication, portals, technology, regulation, lawsuits, and more. But the tone at REALiTY was different. While the same topics were discussed, the overall message was a more polite and calm, “pay attention, eh?”
Here are some of my notes and takeaways.
Rob Hahn – The Age of Capital
Rob and I rarely take the same approach and we’ve been known to butt heads in the comments more often than not, but his presentation, for me, was a stand out. He calmly and succinctly laid out the path of big money in the industry, and why those who have it are creating some of the biggest changes we have ever seen. His argument that almost all of the challenges we face are due to an over-saturation of agents and a business model that depends on numbers isn’t a popular one, but it’s not wholly untrue. And his deep dive into where the money comes from, where it’s going, and what is being done with it was an eye-opener for many attendees.
The Future of Brands panel
Blair Anderson – Redfin
Darren Jacklin – eXp Realty
Bill Fowler – Compass
Redfin has been in Canada for one year, eXp Realty has been here for a few years and is growing rapidly, and Compass has not yet entered the Canadian market. This discussion was further proof that not only is there a market for everything, there is also an agent for every model. One thing I did notice – they all described themselves as “technology companies.” Redfin focused a lot on tech driven leads, eXp focused on the tech-enabled digital existence, and Compass focused on tech-enabled agents.
Sherry Chris moderated this panel and my favorite question was, “we used to talk about a time when fewer agents would be better, and now we’ve gone the other way. Is the future fewer or more?”
Blair (Redfin): “We want more controlled consistency. More isn’t necessarily better. Quality is better.”
Darren (eXp): “People need people they can trust.”
Bill (Compass): “It depends on the marketplace. Today’s consumers won’t tolerate a part-time non-professional.”
Did they answer the question? You tell me.
One thing that was interesting – Bill (Compass) made the comment, “Unlike recruiting, when you acquire people, you have to treat them differently. You have to treat them better. Anyone can buy affection. Maintaining that is another challenge.”
My prediction – Compass is already looking at the Canadian market and they’ll be here before long. (And did I hear a subtle hint from Redfin about an upcoming iBuyer option?)
Speaking of iBuyers…
Anshul Ruparell – Properly
Curt Beardsley - Zillow
There is currently only one iBuyer option in the game in Canada. Properly showed up big for this panel. Zillow was also there, and Opendoor was on the agenda but was a no-show. Canada has a smaller market – but there is still big opportunity for iBuyer options. Nobu Hata moderated this panel, which introduced this concept to many Canadian agents for the first time. There was a lot of chatter in the lunch room after about how this might work here, and what kind of capital it might take to break into a market like Toronto, where the average price for a home is over $800,000. Properly is definitely making a mark, and Anshul noted several times that they entered the Ottawa market just weeks ago and have made 5 purchases in the past 24 hours. Definitely one to watch. Zillow said they have no plans to enter Canada with Zillow Offers. They definitely do not see that on the horizon. At all. YET.
One really handy tidbit that Curt (Zillow) shared: They see their largest uptick in requests for instant offers from people looking to sell in the spring market – but those requests are coming in October and November. So, if you are waiting until the new year to prospect for those sellers, you are likely already behind.
Jack Miller shared the T3 Disruption Report, specifically for Canada. (OREA members can download it here.) Not a whole lot of new or earth-shattering data in there, but a very well-written dialogue of what has changed, why it’s changed, and what changes might we be facing. Their conclusion is that the Canadian real estate industry is ripe for disruption, but it’s going to be more difficult for the disrupters than it was in the US. Canada has a smaller population, and large land mass, a protectionist stance on data, and a bi-lingual landscape.
There were some things of note that are similar to the US:
There were still a ton of men on stage. On the 3-day agenda, there were 42 men and 18 women. Just like in the US, there is a significant gap between the number of women in the industry and the number of women in leadership and on stage. Time and again we see panels of all men, or an entire roster of all-male leadership in companies. I am happy to see that starting to change at the elected and volunteer level, especially in Ontario. Many of the American speakers remarked on the youth and the diversity of the audience, and I sincerely believe that this is going to be an important consideration for those companies that want to break into this market. (And for those already here that want to grow and adapt.)
Also similar to the US, there is a fair bit of defensiveness and denial about outliers. Purplebricks is a great example. They have been in the news a lot these past few weeks, and they are known for running ads that aren’t very popular with other realtors. The OREA organizers took a lot of heat online for having Purplebricks on the agenda, but I have to applaud them for fairly presenting a multitude of business models. I also have to applaud Randall Weese for politely presenting the 10-year history of his company in Canada, and taking the Q&A portion like a pro.
There was a fair bit of talk about serving the consumer as a priority. Most of the speakers and panelists mentioned it as either a goal or a point of difference. An interesting note – sold data is still not widely available to consumers in Canada. We in the ‘Great White North’ are still operating very much as the gatekeepers of the data. In some cases it’s even a point of pride. But I feel we are in danger of that being not only a source of complacency, but also an easy door for disruption on a big scale.
Lastly, a big announcement from stage this week. The Trust in Real Estate Services Act (TRESA) was passed into law. This replaces the former law known as REBBA (Real Estate and Business Brokers Act), which was two decades old. This is big news for Ontario and for real estate in general. It accomplishes 5 key things:
enables regulatory changes that would improve consumer protection and choice
improves professionalism among real estate professionals and brokerages through enhanced ethical requirements
updates the powers available to RECO to address poor conduct and improve efficiency
creates a stronger business environment
brings legislation and regulations up-to-date and reduce regulatory burden
In short – the goal is to improve the data and info that consumers have access to and make it harder to remain an agent if you are unethical. Both very positive changes, in my opinion.
I am already looking forward to the next OREA event, and I congratulate Tim Hudak (OREA CEO), Sean Morrison (OREA President) and all of the staff and volunteers on an extremely well-done event. Ontario (and Canada in general) may be a smaller market than the US, but it’s still growing, adapting, looking forward, changing… and readying for disruption.