2018-2019 Annual Report Highlight
The Alberta Real Estate Foundation (AREF) is approaching its 30th anniversary which is an opportune time to ponder our past and look ahead to our future. As we reflect on our many successes over the last three decades, we are also exploring how to modernise our model to ensure the Foundation is well positioned in the changing world of payments, interest rates, and community investment.
The Foundation was created in 1991 by provincial legislation, the Real Estate Act, to enhance the real estate industry and benefit the people of Alberta. The funding model works like this: When a home buyer deposits money in trust through a real estate broker, the interest earned on the deposit is accumulated and forwarded to AREF to invest in the province. AREF has invested more than $21 million towards 620 projects in the areas of community innovation, education and research, housing, industry leadership, and land stewardship.
When the Foundation started collecting funds 30 years ago, interest rates were high. Recently, they have been historically low. Real estate professionals have also seen dramatic changes in banking, payment verification, and compliance procedures for money laundering. In addition, the 2008 banking crisis resulted in new international banking regulations that change how financial institutions regard short term deposits.
A number of research papers written for our Foundation and the Real Estate Foundation of BC (REFBC)–which follows the same model–have detailed the challenges. These include lower interest rates and higher banking fees compressing Foundation revenue; stakeholders expecting more efficient transactions; and short-term commercial deposits becoming less attractive to financial institutions.
It’s time to revisit the way we do business.
We are investing $100,000 in a year-long comprehensive process to modernise the Foundation model and ensure we can keep innovating and serving Alberta communities for decades to come. This project, in partnership with REFBC and Platform Calgary, will provide the Foundation the opportunity to work with stakeholders to create better workflows and better consumer protection.
A new Real Estate Technology Lab held in Calgary and Vancouver will bring together a number of different stakeholders to generate thought leadership, foster new thinking, as well as identify and help adopt solutions. The lab will convene AREF, REFBC, the Real Estate Council of Alberta, legislative bodies (Service Alberta and BC’s Superintendent of Real Estate), real estate professionals, brokerages, lawyers, financial institutions, start-ups with relevant technologies, and others. Together these stakeholders will explore industry challenges, identify best practices, and accelerate relevant technologies.
The lab will tackle pressing challenges such as the need to automate workflows for residential property purchases and support the long term vision to advance and improve the real estate industries in the two provinces.
AREF and REFBC are taking a leadership role in modernising our funding models. This will lead to a better form of consumer protection, increase revenue for our Foundations, and strengthen the real estate industry’s reputation by positioning both Alberta and British Columbia as innovative real estate ecosystems.