Disruptive technologies to play a greater role in real estate: Report
Virtual tours would reduce need for physical showrooms, Urban Land Institute says
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The Urban Land Institute has just released their annual Emerging Trends in Real Estate report, chock full of fascinating data, findings and commentary about both the Canadian and U.S. markets.
Two observations from the report will certainly ring true for Torontonians: affordability will continue to decline, and prospective purchasers priced out of the housing market may be renting for the long term.
The highly-regarded report is produced each year by an army of esteemed analysts from the ULI and PWC.
This year, they anticipate continuing growth for Canadian cities, and the proliferation of master-planned communities.
“Canada’s urban populations are set to continue to grow — and their needs are evolving. Because of this, mixed-use projects combining residential, retail, and commercial components continue to thrive.”
The authors of the study also suggest that disruptive technologies will play an even greater role in the real estate industry well into the 21st century. From 3-D computer conceptualizations in the planning stages, to offering virtual tours, thereby reducing the need for physical showrooms, adopters of these new technologies will no doubt gain a competitive advantage.
Augmented Reality, for example, has some industry watchers imagining a scenario where prospective clients chase avatar realtors through condo sales centres, à la Pokémon Go.
The ULI report says that the popular internet game has demonstrated that AR can motivate people “to actually get out and visit locations, even properties they had not planned in advance to visit.”
The authors express grave concern regarding the turmoil wrought by the global financial crisis that has “violently upended financial markets around the world and hammered real estate markets in the United States.” With recent world events, tectonic geopolitical shifts and uncertainty in global markets, one wonders if condos will continue to be a robust investment opportunity in the GTA.
Although not one of the authors of the report, ULI executive director Richard Joy speculates that from an investment perspective, the Toronto market may not continue to produce the kinds of yields that we’ve come to expect over the past few decades.
“There are a lot of factors that could easily be at play that might dampen the escalation in housing prices,” says Joy.
“Government policies might try to discourage that in the future, fearing that the issues of housing affordability, for those who are looking at housing from a shelter perspective, are being compromised.”