Canadian Housing Market Discussion with RE/MAX Executive
Population Growth, Cheap Money and More
RE/MAX Executive Pamela Alexander’s history with the RE/MAX brand and the greater Canadian housing market runs deep, having spent 40 years with RE/MAX after her father, Frank Polzler, together with his business partner Walter Schneider first brought the brand to Canada in 1980. Combined across Canada, RE/MAX now has 21,500 agents and almost 1,000 offices. “It certainly is a brand that has made its way in the last 40 years. Canadians have placed a lot of trust in us,” Pamela told Financial Post reporter and Down To Business host Emily Jackson in a recent podcast, where they discussed everything from industry disruption and professionalism, to RE/MAX’s innovation and legacy.
Proptech and the Canadian Housing Market
Technology has removed much of the friction associated with the real estate transaction of the past. “It has made the life of the Realtor easier in many ways, and it has made the transaction for the consumer better,” Pamela reflects. Her expectation is a continued evolution of the industry thanks to technology, with the benefits extending to both consumers and the real estate industry.
The new reality also comes with some murky areas to navigate, namely “fake news” and the idea of “disruption.” But as the CEO of RE/MAX INTEGRA, which has been dubbed Canada’s original real estate disruptor, Pamela’s view is a positive one.
“One of my roles as the CEO for several decades has been to look to the future…and judge every potential threat to our industry and our business with open eyes and an open mind. What’s been very interesting through the entire process is the fact that consumers, even with all of these incredible choices that they have, are still opting about 90 per cent of the time to use a Realtor.”
In 1980, the Canadian real estate industry was controlled by banks and trust companies, with a few national brands that saw profits heavily favouring brokers, and top-producing agents subsidizing the non-producers. Business partners Frank Polzler and Walter Schneider changed the game, introducing a new business plan that put commissions into the pockets of the agents who earned them. And thus, RE/MAX INTEGRA – the “home of the top producer” – was born. True to Polzler’s and Schneider’s vision for the company and the industry, the best agents joined the brand and conquered the Canadian housing market. Today, RE/MAX has #1 market share in Canada – a position that it has held consistently since 1987.
“We see information flowing to consumers on a consistent basis. What’s really important is that this information is accurate,” Pamela notes. Therein lies the key to continued success in a rapidly changing industry where “disruption” is the norm.
“A good real estate agent is an advisor, helping you through the bumps of the real estate transaction. Hopefully their knowledge, expertise and professionalism will have value for you as a consumer. If there’s no value, that’s when we’re in big trouble as an industry. We have to continue to find an important role. If we can’t do that as an industry, we’re going to be disintermediated, like so many other businesses have been.”
Pamela doesn’t see a big shadow looming over the industry, at this point. “There’s room for all kinds of different challenges, technologies and real estate companies and systems.” Pamela believes this is precisely what makes the industry long-timers better operators, more open-minded, and able to cater to consumers’ wants and needs, “to be sure that we stay front-of-line.”
Hot Canadian Housing Market Brings an Agent Boom
In the podcast, the host points out that hot Canadian housing markets like Toronto and Vancouver have seen a boom in real estate agents. According to the Canadian Real Estate Association, there are 125,000 agents in Canada – a national increase of 25 per cent in the last decade. What does a boom like that mean for RE/MAX?
“Because of the way RE/MAX is set up, agents have to have some financial skin in the game to be part of our system. We look at [the boom] as a challenge, but not necessarily to who we attract.” Pamela stresses the importance of professionalism and commitment to the field. She notes that half of agents in Canada don’t do a single real estate transaction in a given year.
Professionalism in the Industry
“My hat is off to the leaders and regulators of the industry, to continue to ensure education is constantly demanded and improved. But there’s a big fail on the part of actually participating in the business. Many people that are in the real estate business across the country today are part-time agents. They do maybe one, two or three transactions a year, if any at all. They may have a full-time job [elsewhere] and they’re not really full-time, dedicated real estate professionals. RE/MAX boasts that we outsell our competition three to one, and that comes from outside industry numbers. The fact is, our system really attracts people that make this a career, who do a lot of transactions which gives them a lot of experience. Transactions equals experience.”
Pamela says the experience is what allows agents to help their clients through any kind of market, by giving solid advice and taking the emotion down a couple of notches – especially in these hot markets where people are being outbid constantly. “So, at RE/MAX the boom hasn’t affected us…but as an industry I do remain concerned because tied to education, there needs to be a production element. You shouldn’t be able to stay in the business unless you do a minimum number of transactions a year…to be a functioning Realtor in an industry that is complex, where people are making the biggest decisions of their lives.”
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