How to respond to the transitioning real estate industry
May 10th, 2017 | By FCT
Death and taxes, according to Benjamin Franklin, were the only certainties in this world. For all his wit and wisdom, he missed one obvious thing – change.
As pioneers of the title insurance industry in Canada, FCT constantly responds to change with its own innovation. This ability to adapt is even more important in the current real estate market. New regulations are in effect that are throwing the market into chaos. That’s what this blog post will address – how to respond to change and chaos.
For the past year, we have interacted with some of the most compelling personalities in Canadian financial services. We went deep with Fisgard Capital’s Hali Strundlund-Noble, our former president, Pat Chetcuti, Dominion Lending Centres’ Jay Seabrook and Paradigm’s Kathy Gregory—original minds all— and we like to think we got gold. Most of all, we discovered some remarkable commonalities.
Reflecting upon the shared intuitions from our trailblazers, this is what we learned:
- It is important to stay resilient and responsive to ensure we can deal with business threats.
- Intuition plays a key role in decision making – where intuition relies on and emotions and expertise-based analysis of data.
- The benefits of adopting a startup strategy – rapid response, great team chemistry and staff retention.
That’s not all. Researchers have confirmed “that the more unstable an organization’s environment is, executives reported the reliance on their intuition, and their organizations’ performance was better than the industry average when they did so.”
Takeaway? Chaos is good. Instability inspires creativity and entrepreneurial behaviour. And, recognizing a good decision right now is better than a perfect decision next week. This is good because odds are we’re going to see more chaos this year—not necessarily more than usual but almost certainly in new forms.
So: the Canadian mortgage industry has cracks all over it—our trailblazers shared this truth time and time again.
Why? There are deficits in client education, in process innovation, and in responding to regulatory change. There are gaps when reading the fog that lies ahead. Or when there’s technological disruption that drives big banks into agile best practices. In addition, there is more potential disruption with upcoming regulatory changes, FinTech, blockchain, peer-to-peer lending among a myriad of allegiances for financial service businesses to navigate.
What’s going on in the industry?
- Increased CMHC mortgage loan insurance premiums
- More rigorous stress tests for property buyers
- Capital gains reporting changes
- Portfolio insurance changes
- Tax on foreign buyers
- Expanding rent control, and more
How will this play out?
From broker to lender, people begin to worry. But as it turns out, worrying is actually good for us.
This year, the mortgage marketplace will reward not just those capable of seeing beyond the numbers to the stories beneath and then pivoting, but also to those who can use the anxiety. And we all experience anxiety when change hits us right between the eyes.
Here’s the paradox.
It’s not the worrying that freezes us. It’s our inability to get past the moment the worry does freeze us. This is the moment when powerlessness wins and we’re no longer open. What freezes us is not surrendering to the anxiety—the paradox is that worry is actually doing something.
In fact, research shows that worry motivates us and makes us better planners. A crew of enterprising researchers looked at rumination and discovered that people who sat with their anxiety tended to have far higher verbal intelligence than those who don’t.
The ability to apply that intelligence is quite likely the recipe for success. And here’s how you can do that:
- Use worry as a mindfulness tool: Worry is often based on expecting something to happen in the future. The cues of feeling the physical tension of worry or noticing that you’re spiraling into despair can bring you into the present. When worry surfaces, allow yourself a set time to stew in it, and then start a distracting activity.
- Plan ahead: Essentially, worry helps to prepare us. Once we decide on the different actions we can take in various scenarios, the need to worry is eliminated. When you worry about a particular situation, balancing the negative with a positive action plan will help you set your fears aside.
- Create a support system: Fear and worry can leave you feeling isolated. However, when we feel a sense of connection and support, our fears can be calmed. Based on the plan you create, build a support team to help you action your plan or just to share the worrisome moment with you and hold you accountable.
How are you responding to the changing real estate industry? Share it with us in the comments!