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Born in a boomtown, Phil Soper has seen his share of runaway housing markets. Soper, raised in Calgary, was exposed early to the nauseating ups and downs of the city’s home prices, appropriately Rocky Mountain-esque in how their exhilarating peaks suddenly became horrifying precipices.
“One of the popular bumper stickers of my youth was, ‘Please God, let there be another oil boom. I promise not to piss it away this time,’” Soper says. “I thought that was an appropriate motto for the real estate industry.”
Soper’s ability to view the industry from a distance – as a whole within the greater whole of the Canadian economy – has been key to his success as the CEO of Brookfield Real Estate Services, Royal LePage’s parent company. While many were skeptical about how a former IT executive – Soper had been with IBM for 17 years – with no real estate experience would handle the reins of a real estate company, Brookfield saw Soper as an outsider with fresh ideas and a propensity for seeing what’s coming over the horizon.
“Real estate, at its core, is one of the purest supply and demand economics-driven industries there is,” Soper says. “If you understand the levers that drive the economy overall you can apply those to the real estate industry. You can understand why things are happening and have a pretty good eye to what’s going to happen next.”
Fright and flight
“The real housing problem that has me worried in 2017 is Toronto,” says Soper. “People mistakenly think if house prices are going up rapidly it must be a good housing market and nothing could be farther from the truth.”
While Soper is often asked to comment on the Canadian housing market, the overall health of which he says extends to almost every market besides Vancouver’s and Toronto’s, he is rarely asked how its fluctuations will affect Royal LePage’s 18,000 agents. With inventory drying up across vast swaths of Ontario and BC, and sales showing massive year-over-year declines, what do Royal LePage’s agents have to look forward to if Canada’s largest markets suffer a full-on correction?
“There’s what you call in the industry a ‘flight to quality’ when markets tighten,” says Soper. “Essentially the part-time agents and the narrow service/low fee models suffer because the price to the consumer isn’t that variable. It doesn’t matter how cheap your real estate company is if no one’s buying your house.”
Soper doesn’t see a correction affecting the Toronto market until 2018; but that assumes a lack of election-inspired government intervention.
“I hope it is a naturally driven correction,” he says, “because those result in the softest of landings.” Soper points to the BC government’s attempt to cool housing prices with a Vancouver-only foreign owner’s tax as an aggressive attempt to spark a decline in prices that was largely inevitable.
“I don’t think it had to be because affordability was eroding demand and the market would have corrected by its own right,” Soper says, adding that Royal LePage had predicted a correction in the Vancouver market in April of 2016. “It takes time for a really unbalanced market to adjust.”
The value of disruption
Taking the helm of one of Canada’s most established companies – Royal LePage is 104 years old – meant Soper would have to fully immerse himself in the organization’s long-established culture. He was eager to do so.
“Our Royal LePage motto is ‘helping you is what we do,’” he says. “I adopted that when I first came in because I thought it spoke well to the servant/client-first focus that was in the DNA of the company but would also succeed in the modern world.”
That marriage of classic service and cutting edge strategies has been in place since 1995, when Royal LePage unveiled the real estate industry’s first online portal, and has resulted in a number of recent innovations that have Soper visibly excited. In 2016, the company partnered with Google to launch Travel Time, a search function that allows potential buyers to find homes within a desired commuting distance, and has recently introduced Your Perfect Life, which leverages dating site technology to match buyers with their perfect neighbourhood. The company will also be rolling out a new online CRM and marketing center for its agents, which will allow for greater automation and eliminate third party marketing costs.
“We build a better mouse trap because we know if we don’t, someone else will,” he says.
Soper, a believer in the disruptive business model, sees the agent experience on the verge of a revolution that will be sparked by the integration of technologies and a greater use of intelligent software.
“I think, more and more, the menial tasks of serving both Realtors and consumer clients can be done through automation. To do that, we need to integrate data, integrate systems and make it incredibly easy to use,” he says.
But Soper expects some pushback, the inevitable result whenever a new technology threatens appears to make agents seem less necessary.
“When I came in, which was only 15 years ago, there was a big debate as to whether photographs should go on listings,” he says. “And then a debate as to whether or not people should include addresses.
“Whenever it’s better for the consumer – if you provide them information, if you provide them insight – even if it appears at first blush to be worse for you, in the end it’s going to be better for you and better for your business. If you don’t disrupt the industry, someone else will, so you better think long and hard before you say no to something that’s going to be better for consumers.”
Reprinted with the kind permission of REP magazine. REP has lots of interesting articles on Canadian real estate every day.