Imagine you had behind-the-scenes access to data showing exactly what buyers were looking for in Vancouver based on 6 Million+ inquiries? Now imagine how this could help predict Vancouver’s next hot neighbourhoods. Finally, stop imagining because this week we made this a reality and did the work for you! Simon Bray, President of REW.ca, joins Matt & Adam to give a market overview from pre-covid to lockdown and beyond. How can REW data predict market trends? Which areas are a great investment? And will the market heat up for the last quarter of 2021? All this and more on this week’s episode. Don’t miss this one. Trust us!
Vancouver Real Estate News, Market Updates, Insider Tips, Stats, & Analysis
Please tell us about yourself.
I’m from South Africa and after university, I moved to Durban, working for one of the largest property portals in Africa. Every country on the planet buys and sells real estate and they’re doing it increasingly online. Through that community, I’ve been able to travel and work all over the world. After South Africa, I worked in Western Europe for a few years and now am in Vancouver. I also worked in Asia and Latin America.
I’m a tech guy who got into real estate. But my father was a retail architect so I was plugged into real estate development throughout my childhood years. I got into software development and started a software company that happened to serve real estate professionals. From there, I got more and more into the real estate side.
Does Vancouver real estate make sense?
It’s been an eye opener for me. It’s an unusual market. In Vancouver, real estate is viewed as a financial asset first and a social asset second. But it’s not completely out of context. Every country seems to have a “Vancouver.” But it’s one of the most exaggerated markets that I have seen.
What excites you about real estate?
I’m excited about how important real estate is to society. It’s very foundational in Western societies to own the home you live in. Technology should, and increasingly is, making this whole industry more transparent and simpler. It brings more people in.
Can you tell us more about REW?
REW has been in Vancouver for years and years. It used to be a print publication insert in all of the weekly newspapers and they began a digital presence in the early 2000s. In 2010, they got more serious about building an app and portal for real estate search. Over the last 10 years, REW has established itself as BC’s favourite property platform and we do about twice as much traffic as our nearest competitor.
Is REW disruptive in the real estate market?
I’ve thought about this question throughout my career when considering a property portal’s role in real estate. We’re creating tools to help people have a better experience. But there’s a debate about whether those tools are disruptive or not. We are just as much members of the real estate ecosystem as a realtor or a mortgage lender. A portal is just another part of the ecosystem and it’s a part that is growing. Sometimes that makes people feel uncomfortable.
But looking at every country I’ve worked in, the portal is one of the best parts of the real estate community. It represents the agents and the listings well, and gets the consumers excited. It doesn’t consolidate the market anymore than it was consolidated before. But what we’re seeing with property portals in the US is different and that may make people uncomfortable.
How is Canada’s real estate industry different?
I’ve just bought a house so I’m learning about the process as I’m in it. Canada’s real estate industry seems to have taken the best parts of the technology development on offer and resisted some of the more controversial parts. But if you’re a consumer, you might want to see those controversial parts.
For example, data access. How much is available to people on public platforms? There’s an idea that real estate professionals are entitled to more information than an average homeseeker. This debate happens in every market but Canada seems to be farther back than other markets around the world. The industry here seems hesitant to publish information that consumers are hungry for.
Why is there that hesitancy?
There’s a vibrant real estate industry in Canada. There are boards that add a lot of value. But that’s the balancing act. I don’t think everything should be available online, for free, to everyone. That will mean a loss of a lot of the connection and human experience that people are looking for. But if you can meld that connection with the data access, you have a fantastic consumer offering.
Where it falls down in Canada is the people who are trying to provide those tools are seen as outside the industry, instead of trying to move the industry forward. At REW, we want to make the industry better by being a part of it, and not disrupting it.
How do you see the business model of REW? How does data tie into that?
Everybody enjoys a data-rich experience. A data-rich environment makes me more confident as a consumer. We call it a home search adventure at REW. If we can inspire confidence in that process, that gets people over the uncertainty. But when it comes to making the transaction decision, those data tools are not working as you might think.
We see many companies in the US saying that real estate should be easy. You should be able to Amazon-style buy a house in one click. And there are some advantages to that lens. The other lens is that real estate transactions were never meant to be easy. They’re important, infrequent and hard-earned transactions so they can afford to be complex.
The role of a real estate platform is less about simplifying the journey and more about making it a pleasant and enjoyable one. The better these platforms get, the more time people spend in the decision making process. You’d think the better the portal, the quicker the decision, but it’s the opposite. You’re giving people more time to enjoy the process of choosing their next home.
How is REW different from the competition?
Experience is a tough thing to define. The one thing that differentiates REW is we make a real effort to build a product people will enjoy using. The other thing that differentiates us is that we try to aggregate a lot of content. We take a homeseeker-in approach: What do people want to see when they’re looking for a new home?
We add new construction homes, that aren’t in the MLS, to our platform. We have rentals, which you don’t often see listed together with homes to buy in Canada. And, of course, we have resale listings. So experience and content are the two main things that help us stand out.
How useful is REW for understanding market trends?
Not as useful as it could be! That’s something we are working on. To us, it’s pretty insightful and we’re working to share that information. We get insights into what people are looking at, which predicts the sales 6-12 weeks after the traffic we see on the site. Making that available to the market is our next step.
The hotter the market, the smaller the time between interest and sales. In March, there was only 1-2 weeks between the flurry of interest and flurry of sales. As the market stabilizes, the gap widens and we can provide insight to real estate professionals ahead of sales. We’re able to provide hyper-local trends, which is very important for real estate.
What trends are we currently seeing in the market?
After the bottom of the market fell out in March 2020, we had a huge supply and demand loss. We lost 50% of our traffic in a week. Traffic began to build up through April to June 2020, and then it really boomed through the end of 2020. We then saw a huge listing spike in the beginning of 2021. We were seeing 3000 new listings in Vancouver every week.
But the most interesting thing through covid was who the users were. There was a huge difference in demographics from pre-covid searches. There was a huge growth in much younger buyers. We’re still seeing a growing interest in this younger demographic focusing on real estate; there’s been a 200% increase in sessions by people under the age of 30. That’s a huge blip in a very short time. I think that’s an indicator for the whole market going forward.
I think one of the things driving that is higher savings. There’s nowhere to put those savings because people are staying home. They want to hedge against inflation and real estate is a way to do that. People want to get into real estate sooner. There’s also a social shift away from travel and towards owning your own place.
Another trend at the beginning of the pandemic was people who were living downtown who then moved home. So those people may now be looking to buy a home of their own.
What are we seeing now? Are you bullish on the fall market?
I am bullish on the market for the fall. Will it be the same as March 2021? Definitely not. But I think it will be a good uptick from where we are now. I think there are a lot of listings waiting for the fall market. Overall, all the signs are positive.
The election is a free radical in the market. How will that affect policies? How will that impact interest rates and lending criteria? How will it impact supply-side efforts and housing projects? But otherwise, the signs are positive. The Canadian economy seems to be rebounding well. The macro-factors, like immigatrion quotas, for cities like Vancouver and Toronto are very strong.
This summer we’ve seen a 30% increase in traffic from July 2019. It feels slow but it is busier than it was two years ago.
Where are people searching in the Lower Mainland?
The top performers consistently over the last 10 months have been Kits, White Rock and Cloverdale in Surrey.
Mount Pleasant is actually less in demand than it used to be. There’s a huge amount of interest in Surrey. Squamish has also been very good; I was looking there myself. I think Squamish will be a great growth market.
The downtown core and sub-markets in Vancouver saw less demand throughout the pandemic. But there was some great resurgence and if you bought condos 3-4 months ago in downtown Vancouver, that’s where the money was to be made.
The West End and Main Street are seeing a lot of resurgence in Vancouver too. There’s a great growth in interest in demand and we’ll have to see if that translates into sales. It’s a sign of going back to normal and the new hybrid work scene.
Maple Ridge has been a stand out market for the last year. Everyone who wanted a detached or townhouse went to Maple Ridge because that’s where the supply was. Prices also rose.
Let’s talk more about the West End. There are great resale places you can buy for $1000/square foot, compared to the new buildings coming up around $2300/square foot in the same area. There’s some NIMBY-ism but the area is changing. I think it will be a phenomenal investment.
Not being from Vancouver, I can see the appeal of the West End. I keep hearing about the “missing middle” in Vancouver. For me, the West End is the best proxy of that. It’s larger, older apartments in low-level buildings with access to parks and in a cool neighbourhood. We’re seeing huge demand in the West End. It’s the same demand we’re seeing in Cloverdale for the townhomes. People who want to get into the market but don’t want to live in a downtown tower, or people who want a bit more space, are heading to the West End. It’s an area to watch.
Do you have top areas where renters are looking?
Because of the way the industry is structured with so much peer-to-peer renting in BC, it’s not as easy to get that supply data. We have projects in the pipeline to bring more of that data to the public. In Alberta and Ontario, we have more of that rental data.
What other places have done well?
Steveston, Westwood Plateau, Burnaby and Abbotsford have all done quite well in the last 12 months. The next Maple Ridge is going to be Mission. Mission isn’t on anyone’s radar right now. But it’s the top long term draft pick. There’s a huge amount of supply coming to Mission and it’s the right type of projects. And the demand is on the uptick.
There are a few thousand homes coming up in Mission in the next 5-10 years. With that much supply and the amount of demand for that neck of the woods, you’re going to see that become a major market in Vancouver in the long term.
What is REW’s relationship with developers?
Vancouver has been a hot market for a long period of time so a lot of developers build what they think will see and guess what? It sells. So this desire for market intelligence and consumer information is not as acute. But if they knock on our door, we’d love to share the information we have on demand patterns, floor plans that work, price points, etc. We have lots of historic data and there’s a lot of things we could test too. If developers were more excited about market intelligence, REW could be a source for that.
What are REW’s future goals?
We want to take something that is a public platform today and make it a personal experience. Because real estate is personal. Digital platforms can make that experience more personal and catered to every individual.
We kicked off REW One this year. REW One is our version of REW for realtors and agents who are interested in their local market dynamics. We want to continue to grow that product line.
We want to make agents more personable and accessible to homeseekers. The listings are always prominent but ultimate people will transact with other people. So we have a LinkedIn feed concept for realtors so they can share more of themselves to the market.
We also have some great ideas for homeseekers coming in 2022. Watch this space!
Are there models that REW looks to for inspiration?
From a business point of view, the business of real estate portals in other countries is very inspiring. It’s groups of founders who got together 15 years ago to bring the industry together and now they have a billion dollar business. The homeseekers trust them as the source for their real estate journey. But from the experience point of view, not many people are innovating the space. They’ve turned a newspaper insert into a digital format. So I think there’s room for the next evolution of the real estate buying experience.
I think of Airbnb as an inspiring model that revolutionized travel and what a marketplace can be. It facilitates a relationship between guests and hosts in a very elegant way. From an experience point of view, that’s a great model. Could something like that exist for the real estate purchase process?
What excited you about Vancouver? What made you want to come here?
It was a combination of a few things. There was a great business opportunity with REW that had a lot of room for growth. There is a nagging opportunity in the real estate experience in Canada that I wanted to be a part of. Vancouver is also a beautiful place – the scenery, the system, the people. Coming from Africa, the sense of frontier in Western Canada really appealed to me. If I walk out of my backyard and keep walking, I’d never be found again. Vancouver is a young city and there’s a lot still to be discovered. People have a sense of adventure here and that was appealing to me.