Proptech in Canada report first ‘comprehensive’ sector study
Canada is becoming a global hub for real estate technology and innovation, and Proptech Collective has just released a report that offers insights into key trends, startups, investors and accelerators within the space.
The report analyzed some 300 Canadian proptech (property technology) companies in construction tech and commercial and residential real estate. It involved interviews with more than 20 real estate companies, proptech startups and investors.
The report was written by three Proptech Collective members: Alate Partners principal Courtney Cooper; Oxford Properties Group tech strategy manager Alice Guo; and real estate professional Stephanie Wood. It was produced with sponsorship from PwC Canada, LMRE and BDC.
“You have to start somewhere and this data didn’t exist in one place before,” Cooper told RENX. “We think it’s quite comprehensive, but a big part of this report and putting it out there is to generate responses that tell us what other companies exist and what we’re missing.”
Proptech Collective is a Toronto-headquartered, not-for-profit organization comprised of real estate professionals, technologists, entrepreneurs and community builders interested in technological innovation. It provides a forum for people to connect, learn and work with each other to advance the industry.
Proptech and its growth in Canada
“Proptech is not a new phenomenon,” said Cooper, noting real estate technology groundbreakers such as Yardi and Altus Group have been in business and had a Canadian presence for many years. “There has always been real estate technology, but there has been a significant shift in the environment and the amount of companies, and the technologies.”
Canada has become a prominent proptech market for a number of reasons and COVID-19 has accelerated the adoption of technology in the real estate and construction industries.
Ten of 2020’s 50 largest global institutional real estate investors are Canadian and they’re building internal innovation teams, expanding strategic partnerships and indirectly or directly investing in proptech to gain a competitive edge.
“They’re very much focused on how they use technology within their portfolios and anything that can increase NOI (net operating income) and anything that reduces costs,” said Cooper. “There’s a lot of interest in sustainability, ESG (environmental, social and governance) and net-zero.”
Canada is the most educated country of the 37 in the Organisation for Economic Co-operation and Development and has approximately 500,000 students enrolled in post-secondary science, technology, engineering and math programs.
There’s support for innovation through more than 175 incubators and accelerators as well as $3 billion in annual national tax incentives.
People with startup experience from other industries are now becoming involved with proptech, according to Cooper.
Canada has a diverse population and friendly immigration policies which are expected to attract 400,000 new immigrants annually over the next three years.
Canada’s top proptech markets
Eighty per cent of proptech companies in Canada are located in the Greater Toronto Area (GTA), Greater Vancouver Area, Greater Montreal Area, Calgary and Kitchener-Waterloo.
About 46 per cent are in the GTA, which makes sense considering the report claims: it’s home to a large number of real estate companies; it’s the fastest-growing city in North America; it has the most cranes in the sky on the continent; and it’s North America’s largest tech hub, with 24,000 companies employing 270,000 workers.
“There are also great companies that are starting in Edmonton, Saskatoon and some of the smaller markets,” said Cooper.