The Canadian real estate market is poised for significant change in 2025. Driven by a combination of political, economic, technological, and regulatory developments, it is critical for the industry to transform and take advantage of the opportunities ahead.
Technology is increasingly shaping the industry, driving project efficiency, reducing costs, and creating value through the development of innovative, technology-enabled buildings. This report explores three avenues where we see technology transforming the future of real estate.
AI in real estate
Rapid advancements in AI present exciting opportunities for the real estate industry.
Investment and development opportunities
AI's ability to quickly analyze vast amounts of data can help real estate developers and investors identify profitable opportunities while also assessing potential risks. For instance, AI can pinpoint regions with strong growth potential, such as neighborhoods ripe for revitalization, or constantly scan for areas with new municipal zoning or infrastructure projects. Additionally, AI can predict ideal locations for future housing projects by analyzing demographic changes and real estate trends. This predictive analysis enables stakeholders to make more informed and strategic decisions.
Buyer journey
AI has significantly enhanced Virtual Reality (VR) and Augmented Reality (AR), boosting customer engagement. VR property tours allow potential buyers to interact with properties in a more engaging and personalized manner. From residential housing to commercial office buildings, AR visualizations help customers envision properties with different layouts and use cases, aiding in their decision-making process. Furthermore, predictive AI models can optimize property designs, layouts, and amenities based on buyer preferences, making properties more appealing to potential buyers.
Assessing property values
AI can assess property values by analyzing location, sales, and real estate trend data. Combining data analysis with image recognition, AI provides accurate appraisals. While human appraisers are still better at evaluating potential maintenance issues and structural problems, AI appraisals offer a more affordable and faster alternative, allowing the appraiser to focus on the areas critical to achieving the client’s goals.
Marketing
AI’s machine learning and advanced algorithms analyze customer data and predict client needs. This allows organizations to do the following:
- Focus marketing spend on areas of highest return
- Reduce the time and cost of marketing properties
- Ensure alignment between messaging and customer purchasing decisions
- Decrease advertising and communication expenses.
AI can also be used to track real estate trends such as post-purchase satisfaction, community positivity, and opportunities for growth or re-sale.
Property management
Facilitating tasks such as rent collection, maintenance scheduling, and tenant communication, AI-based tenant screening programs help landlords and property managers assess the creditworthiness and rental history of potential tenants—reducing the risk of non-payment and property damage. Utilizing technology to improve maintenance scheduling further increases productivity and lowers costs.
AI Generative Design
Generative AI, which can create original data like images and videos, has made significant progress. This technology aids in designing building interiors, architecture, site plans, and entire neighborhoods, allowing developers to explore multiple design options, costings, and urban impacts efficiently.
Climate change impact predictors
AI shows promise in predicting the impact of climate change on properties, such as flooding, sea-level rise, and extreme weather events. This technology helps developers forecast climate-related vulnerabilities of potential building sites and provides recommendations for environmentally resilient property features.
Sustainability
Driven by public environmental awareness, regulatory pressures, cost savings, and the desire to future-proof buildings, the sector is increasingly adopting sustainable practices to reduce its environmental impact, add property value, and reduce costly retrofits and upgrades. At the same time, technology is playing a pivotal role in advancing sustainability in the industry, with innovations such as smart building systems, energy optimization platforms, and data-driven solutions to reduce emissions and enable accurate reporting measures.
In December 2024, the Canadian Sustainability Standards Board (CSSB) announced the publication of its finalized Canadian Sustainability Disclosure Standards, setting a baseline for businesses to report climate-related information. If they haven’t already done so, implementing accurate and efficient, tracking and reporting solutions for ESG will be a priority technology investment for the industry in 2025.
Decarbonization, net zero, and Canada's Green Buildings Strategy
The real estate industry contributes 30% to 40% of total global carbon emissions.
In response to this juxtaposition, the government introduced the Canada Green Buildings Strategy (CGBS) in July 2024, which is intended to improve energy efficiency in the construction industry, reduce greenhouse gas emissions, and generate jobs in the clean energy sector. The strategy aims to retrofit approximately 11 million buildings and construct millions of new greener buildings in the coming decades. Key components include:
The CGBS will lead to new building codes and standards prioritizing energy efficiency and sustainability, requiring developers to adapt their practices. The government has also announced plans to modernize the Energy Efficiency Act, introduce new testing standards, and phase out oil heating systems in new builds by 2028.
Tax incentives for clean technology
In 2024, the Canadian government ratified four refundable investment tax credits (ITCs) into law, designed to accelerate the adoption of clean technology. The introduction of these tax credits can support construction firms, developers, and property owners in a variety of ways. For example, the Clean Technology ITC can refund up to 30% of expenses toward clean technologies like solar panels, wind turbines, ground or air-source heat pumps, and non-road zero-emission vehicles. The credits are available to all taxable Canadian corporations and cover investments in eligible technologies, including:
With the introduction of these credits, the acceleration of clean technology adoption across the industry will reduce long-term operational costs and reduce carbon emissions, future-proofing our cities and communities for resilience and growth.
Smart cities
Smart cities integrate information and communication technology to enhance urban services such as water, waste management, energy efficiency, transportation, and public safety. The tangible real-world benefits of smart city technology and urban planning decision making is expected to be a significant driver of the development of cities throughout Canada.
Canada’s Smart Cities Challenge
Launched in 2017, the Canadian government's Smart Cities Challenge encourages regions to adopt smart city approaches to address urban challenges and improve residents' lives through innovation and connected technology. The 2023 budget announced a new round of the challenge, highlighting the ongoing priority of interconnected communities.
Economic opportunities of smart cities
The demand for smart city infrastructure and services creates new opportunities for real estate developers. Projects utilizing smart technologies, such as intelligent buildings, renewable energy, and connected public spaces, are likely to increase property values.
In addition, the focus on mobility and rapid mass transit will open up previously lower grade real estate to development.
Fifteen minute cities
While controversial in some quarters, the concept of the 15-minute city (FMC) gained attention during Covid and is expected to continue to influence the future of urban planning.
The intention of having everything residents need accessible within a 15-minute radius does not require a city to be traversable in quarter of an hour. On the contrary, this human-centric design approach creates local communities that contain key amenities and facilities, specifically:
Ottawa and Vancouver have already stated their intention to become FMC’s and pockets of Toronto and Montreal have embraced the approach. For example, the recently developed “The Well” with a go-to-market strategy is “eat, shop, work, live and play in Downtown Toronto.” Further abroad, the $16 billion Battersea Power Station development has gone one further—taking the brownfield powerplant site made famous by Pink Floyd—previously set for demolition, and creating a 42-acre multi-use community accessible by rail, bus, bike, and even boat. In 2024 the development won the Garden of the Year Award 2024 for its roof-top garden.
Final thoughts on technology
in real estate
BDO’s National Real Estate Leader, Jameson Bouffard shares his outlook on the future of Canadian real estate. “After years of the great staring contest there are glimmers of optimism for the Canadian real estate market in 2025. Conditions are improving, the need for additional and substantial increase in housing supply is at the forefront of minds, and interest rates are coming down.”
Achieving success hinges on engaging solution providers with a deep understanding of both technology and the industry at every level. Our dedicated Real Estate & Construction team collaborates with you to provide tailored solutions that tackle your current challenges. Reach out to us to discover the advantages of digital transformation and its potential to elevate your firm's competitive position.