Dramatic efficiencies are on the horizon for the real estate industry.
During the last economic evolution, the Industrial Revolution, there was a net gain in employment.
Many jobs did become redundant in both unskilled and skilled labour fields.
For example, mechanized farming wiped out many unskilled labour jobs and the automobile industry wiped out jobs for skilled workers like blacksmiths and saddle makers.
The Industrial Revolution, and capitalism, created many more jobs than it retired, and boosted the output and efficiency, for both individual workers and companies. Mechanized farming and industrial manufacturing led to a higher standard of living, a higher level of consumption, and healthier, longer lives for the North American population.
However, the information and technology revolution will create efficiencies with net losses in employment. As the cost of labour rises, the cost to implement technology begins to be more efficient.
Assembly line workers are already being replaced with robotics, as well as minimum wage workers in fast food restaurants and grocery stores being replaced with self serve computer kiosks.
The printing Industry was devastated in the early 1990’s when desk top publishing was introduced.
When we look at the future of employment in different residential real estate sales and marketing jobs, the future does not seem bright.
Most people who were born in Canada who are under the age of 35 have grown up with the internet and are getting more and more comfortable buying things on line. In five years, everyone under the age of 40 will be comfortable buying online.
The vast majority of real estate buyers will want to shop from home and in the future, technology will allow them to interact directly with the listing agents of different properties for resale.
With 70 percent of residential resale agents specializing in working with purchasers, competition for the few buyers who use traditional methods will be fierce, and many buyers’ agents will be forced out of work.
As technology continues to evolve, sellers will use apps and A.I. technology to replace listing agents, and listing agent specialists will also be devastated by technology.
Using new technology, the listing agents that survive will have to do a higher volume of sales, and it will likely be routine to represent both buyers and sellers, for far less commission.
The future is not any brighter for listing agents and sales people of new homes and condominiums.
Once developers discover a technology that directly and efficiency reaches their target market of buyers without agents, developers will create efficiencies and more likely move in-house and it will be more difficult for listing broker specialists to attain new home and condo projects to sell, and the cooperating commission of 4 percent will likely disappear for the cooperating brokers.
Right now the most important goal of marketing is to drive traffic of qualified buyers to a sales office for an inside agent to present the product and close sales, using tools like a model suite.
Soon the A.I. technology that is used in your home, Alexa and Google Home, will be developed into a virtual sales person for new homes and condos.
It has already been developed for fundraising calls.
One of the major political parties has been using it for more than a year.
The one computer, the virtual salesperson, can call hundreds of people simultaneously.
This puts the whole team of fundraisers out of work, since A.I. technology is much more efficient.
In the not to distant future, a potential buyer will put on virtual reality goggles, at home in front of his computer, and experience the feeling of walking around inside a virtual sales office and model suite and will interact with a virtual, Alexa technology type salesperson in visual, virtual reality form.
This virtual salesperson will be programmed to present the different elements of the project, build rapport with the buyer, and qualify and close the buyer, like a real human being would.
Once this technology is established, it won’t be long before the goggles disappear, and with the next level of technology the A.I. virtual realty will fill the room around the viewer.
The viewer will have the experience of being in the sales office and model suite, and enjoying seamless communication with a virtual salesperson, who is programmed with accurate information on all the fine details of the project, with no more human error.
A virtual architect, construction specialist, lawyer, and mortgage broker could also all be programmed to be available to supply perfectly programmed answers to a buyer’s questions.
The technology allowing a new home and condo buyer to fill out his personal information on an Ipad and for a computer to generate an Agreement of Purchase and Sale from that information, has been available to local GTA Developers since 2010.
Modern buyers can already choose their colours of their new condo online.
It is now routine for many developers not only to have overseas buyers sign agreements digitally by email, but now local buyers visiting the sales office are also signing digitally, on Ipads. No more paper agreements, and condo documents are also now routinely being supplied by email or on a USB stick.
So the future is coming to many professions, outside of the ones we have discussed, whether we like it or not.
AI technology and or robotics will potentially replace teachers, chefs, manufacturing workers, government workers, firemen, maids, accountants, architects, retail salespeople, logistics workers, and a frightening number of other working class and professional jobs in Canada.
How is China set to adapt?
The effect of China’s one child policy will result in a drastic drop in population beginning in 2029. As the jobs in China disappear, so will the population, due to the result of a low birthrate and an abundance of male babies being born over decades. China will adapt much better to the Information and Technology Revolution than Canada will.
In contrast, the healthy immigration policy that has driven Canada’s success will no longer be fueled by an ever expanding supply of good jobs.
If employment for the working class and professionals is devastated by AI technology and robotics, unemployed people will be unable to consume the amount of goods and services that they have since the beginning of the Industrial Revolution.
There could be a prolonged period of economic adaption to the Information and Technology Revolution in Canada, that could last for a decade or a generation. In life we must adapt or perish. Is the solution for us all to quickly invest in new technology and join the big winners of the future? It might look like the solution.
Just as it did for the VCR Industry, the new technology Investors will saturate the market, and make fortunes, until the fast changing A.I. information and technology revolution makes them extinct, and if they are not very careful, they will lose everything with the birth of the replacement technology.So perhaps the way to adapt and survive in an age of dynamically changing technology, is for us all to proceed with caution and give ourselves time to adapt.
Our children will need to think carefully about which careers will survive the information and technology revolution.
The Information and Technology Revolution will potentially have a devastating affect on future employment and the Canadian economy.
Perhaps we need to develop the vision, to avoid paving the road to our future, from leading us off the end of a high cliff.
Scott Davie, founder of Davie Real Estate Inc., has over 30 years experience in real estate and has been a trusted advisor to many of the GTA’s top developers. He has sold low and high rise pre-construction projects from Brantford to Whitby, and from the Beaches of Toronto to Newmarket. Mr. Davie is recognized as a leading expert on pre-construction real estate sales and marketing in the GTA.